I wrote the original post on Baltimore City’s foreclosure rate three years ago, and thought it would be interesting to revisit the topic and see what the data from the Maryland Department of Housing and Community Development looks like now. You can download the full 2012 Q3 report from MDHCD here, but here are some sample highlights:
- Due to the low level of foreclosures in the second half of 2011, foreclosures in Maryland increased 27.2 percent in 2012, the first year-over-year increase since 2010.
- The number of new foreclosure filings increased by five percent in the third quarter, an increase of 31.3 percent over last year.
- Maryland’s ranking in foreclosure rate dropped from 15th lowest to 16th lowest from 2011 to 2012, the lowest ranking in the region other than DC and West Virginia. The national average foreclosure rate in 2012 Q3 was 40.4 per 10,000 households — Maryland’s was 17.5.
- PG County had the most foreclosure filings in Maryland, with 1,295 filings, 31.2% of the total foreclosures filed in Maryland.
- Baltimore City had the second highest number of foreclosures, with 616 filings, an increase of 21.6% over last year.
- Baltimore City’s foreclosure sales declined by 16.4% over 2012 Q2, but were up 63.8% over 2011’s number.
- Baltimore City also had an increase of lender purchases in 2012 Q3: an increase of 19.1% over last year, and the second-highest number of lender purchases in the state. Only PG County had a higher number.
Hot Spot Activity in Baltimore
16 areas in Baltimore City make up the city’s “Hot Spot”. Mortgage activity in these areas are classified as “High”, “Very High” or “Severe”. Activity in Baltimore City for 2012 Q3 breaks down as illustrated here:
- Severe Foreclosures: 21223, 21202
- Very High Foreclosures: 21205, 21206, 21217, 21216, 21213
- High Foreclosures: 21215, 21214, 21231, 21229, 21218, 21230, 21225, 21207, 21224
The Center for Responsible Lending has issued a new report on equity loss by homeowners who live in close proximity to foreclosed homes — this is a must-read if you want to better understand why your home is suddenly worth less than you paid (besides the fact that you perhaps overpaid).
Some highlights from the report:
- $1.95 trillion in property value has been lost or will be lost by residents who live close to foreclosed properties.
- Spillover costs will drain $1 trillion in home equity from minority neighborhoods.
- This represents a huge setback for homeowners of color who had previously made economic progress.
- Overall, the average spillover cost per family is or will be $21,000 lost in household wealth, representing 7% of their home value.
- In minority neighborhoods, the average loss is or will be $37,000, or $13% of their home value.
- This estimate does not include the total loss in home equity resulting from the foreclosure crisis (est. $7 trillion)
- Also doesn’t include losses in tax revenue, the increased costs of managing vacant properties and non-financial spillover costs, such as increased crime, lower school performance by children and neighborhood blight.
If you haven’t been reading the “Living Apart” series on ProPublica, you’re really missing out. The series is about fair housing in the US, and how things went terribly wrong, despite the best intentions of lawmakers on both sides of the fence. You can read Part 1 here, and Part 2 here.
Baltimore City demolished a block of vacants in West Baltimore — nice to see. It will be interesting to see what the city does with that empty space — homes, or community gardens…or both? You can see how the block looked before demolition here. Note to Baltimore Housing — Contrary to what it says in your press release, Shipley Hill is in West Baltimore, not East.
It’s no secret I’m against Maryland’s Question 7 — and here’s one of the many reasons why I will be voting against it. Giving money earmarked for poor communities like Pigtown, Sharp-Leadenhall, and Westport to wealthy casino developers just doesn’t sit well with me.
If you’ve been following the Baltimore City audit debacle in the news, you might be interested in reading the peer review comments by the Association of Local Government Auditors, and the City’s response to those comments. It’s…enlightening, to say the least.
In Milwaukee, WI, foreclosed and abandoned homes continue to be a problem — yet Wisconsin’s governor Scott Walker used settlement money received from a federal mortgage abuse lawsuit to balance the budget.
Want to buy that vacant foreclosure next door before it becomes a neighborhood nuisance? That may be harder than you think.
Louisville, KY is the next city to create a registry of vacant homes, and a plan for what to do when owners don’t maintain them.
Foreclosed home caretakers sue a Bank of America affiliate in California, claiming the company cheated them out of overtime and wages.
And in the WTF category…If you come home from work one day and find your dishes were done and there’s a bill on the counter, this Cleveland woman may be to blame.
From the Maryland Department of Housing and Community Development:
- Baltimore City saw 1,656 foreclosures in the 3rd quarter of 2009, that’s a jump of 118% over the 2nd quarter in 2009, and an 87.7% increase over the 3rd quarter in 2008.
- Baltimore City had over 850 foreclosure sales in the 3rd quarter of 2009, which amounts to a staggering 3713.2% increase over the 2nd quarter of 2009, and a 1980.8% increase over the 3nd quarter in 2008. Out of those 850+ properties, only 260 were purchased by lenders.
- Baltimore City is only second to Prince George’s County in having the highest number of foreclosures in the state.
- Most of Baltimore City has been designated a “Hot Spot” by DHCD, with some foreclosure numbers in the Hot Spot considered “Very High”, occurring in the 21202, 21223, and 21217 zip codes. (According to the DHCD, “a foreclosure Hot Spot is defined as a community that had more than ten foreclosure events in the current quarter and recorded a foreclosure concentration ratio of greater than 100.”) In the “High” sections, 21205, 21231, 21216, 21201, 21230, 21213, 21224, 21218, 21206, 21225, 21229, and 21215 saw the most foreclosures. Surprisingly, Baltimore City didn’t see any “Severe” foreclosure action, although being declared a “”Hot Spot” and having “high” and “very high” activity is bad enough. Especially when you consider these areas have high concentrations of investor-owned rental properties and vacant houses.
Today’s Baltimore Sun article on renters who are stuck in the foreclosure crisis does a good job of showing the human side to the foreclosure problems in Baltimore City. Also, Jamie Smith Hopkins’ blog post about the same issue offers some solutions for renters.
As a side note, we predict the number of vacants will continue to rise in Baltimore City, as more people decide it’s not worth the effort to continue to pay their mortgage payments. We’re already seeing signs of it in two neighborhoods, where you have a high concentration of what we like to call “vacant not abandoned” homes. How long they’ll remain in their current condition — only time will tell. Baltimore City has enough vacant houses — it’s time to start redeveloping Baltimore for its residents, as it’s obvious that opening the floodgates for non-residents didn’t work.
We often wondered how many of our city’s non-resident property owners were taking the Maryland Homestead Tax Credit and claiming their property as “owner-occupied”. We figured there had to be a few tax cheats out there, right? There were more than a few. One of our readers found 384 of them, in fact. Out of 1000+ vacant homes our reader found in the city’s database that were possibly not owner-occupied, over one-third of the owners are definitely cheating the state (and you, if you’re a resident of Maryland) out of thousands of dollars per year. Maryland is hardly in the position of letting that kind of cash fly out of the State House windows. As usual, we’re going to dig deeper and see what we can find out about some of these property owners. Stay tuned. Baltimore Sun blogger Jamie Smith Hopkins is also on top of this — if you haven’t bookmarked her blog, you should.
In other news, it seems that Baltimore’s favorite drug lord, Milton Tillman III, is feeling the pinch of the bad economy. Thirty-five of his properties went into foreclosure last week. His property at 116 N. Curley Street is currently under contract — maybe that will bring in some much-needed cash.
The City Paper ran an expose on the Baltimore vs. Wells Fargo lawsuit — turns out many of the “victims” were less than stellar citizens, and one “victim” may not even exist. We have to wonder if this is worth the cost of a lengthy trial. How about revamping the City’s housing policies instead, to prevent future disasters?
Correction: Our reader found 1,148 vacant homes that were listed as “Owner-Occupied”. For 384 of them, our reader was able to track the owner’s true address.
You may remember the Baltimore Sun’s Ground Rent Series from 2006, in which Sun reporters chronicled the evictions of Baltimore residents from their homes for their failure to pay their ground rent payments. If you’re not familiar with ground rent, and you’re a Baltimore homeowner — beware. You might own your home, but not the “ground” it sits upon. For a more detailed explanation, visit this link.
We went back to the Baltimore Sun’s series, wondering if we’d find any links to some of the slumlords we’ve been researching. We did indeed, and we’ve found that some of the investors and others involved in the ground rent game haven’t fared very well.
One Baltimore realtor who was quoted as saying “You can make a very good living doing this” (Lawrence Polakoff) has been the defendant in at least 23 lawsuits filed in Baltimore City Circuit Court, most involving lead paint and foreclosure. In a twist of irony, one lawsuit involving Polakoff as a defendant was a Complaint for Ejectment. Polakoff also has ties to Stanley Rochkind, whose activities as a Baltimore slumlord have been well documented by the City Paper, the Maryland Department of the Environment, and the Circuit Court for Baltimore City (cases too numerous to list here).
Baltimore attorney R. Marc Goldberg was quoted in the article twice — “Business is business” and “I can’t deny an economic incentive to make a windfall profit.” We hope he invested those profits wisely, because he’s been sued five times since the article appeared — four foreclosures and one Complaint for Ejectment.
Fred Nochumowitz, of Boca Raton, Florida was the trustee of a family trust that held several ground rents in Baltimore City. The Nochumowitz Trust filed several Compaint for Ejection suits in Baltimore, resulting in homeowners being thrown out of their homes so that the homes could be sold at a hefty profit.According to a 2008 notice in the Maryland Daily Record Fred Nochumowitz and several of his relatives filed for Chapter 7 bankruptcy, as a result of 1 $1.53 million settlement over lead paint violations in the family-owned rental properties.
One of the “investors” that purchased property from the Nochumowitz family was Lauren Montillo. In 2007, according to court records, she was sentenced to a year’s probabtion for maintaining property in a manner that was unfit for human habitation. Another “investor”, Petar Pecovic, was quoted in the article, “The ground rent business is a great business.You just have to be ruthless.” The corporate charter to Pecovic’s business, Touch of Class Properties, LLC, was forfeited in 2007 for failure to file a property tax return.
We also wondered about Heidi Kenny, the lawyer who was the focus of one of the articles in the Sun. She was tried and convicted in the court of public opinion, and the Clerk of Court for Baltimore City, Frank M. Conaway called for the “immediate suspension” of Heidi Kenny’s law license. After some searching, it would seem that Ms. Kenny’s license has not been suspended or revoked, as she is currently the plaintiff’s attorney in several ongoing lawsuits.
We’ll keep tabs on these people, and others mentioned in the series, and see just how well they fare now that the real estate market has plummeted. So far it doesn’t look like most are doing as well as they’d hoped.