Foreclosure bus tour makes local stop By JANE MCHUGH Staff Writer
At lunchtime Saturday, the foreclosure bus tour made its last stop in Bowie: a $317,900 Cape Cod home in the Kenilworth section. A dozen people were on the tour because they're in the market to buy a house and hope to save by purchasing a bank-owned property. The tourists, who live in places like District Heights, Upper Marlboro and Greenbelt, disembarked a little weary because it had been raining and this was the seventh time they'd gotten off the bus to visit a residential property since the tour began at 9:30 that morning.
After inspecting the Levitt house, built in 1963, bus traveler Gregory Faison said it "felt cramped." Faison is a medical supply salesman from Silver Spring whose wife is pregnant with their first child.
The Levitt property was cramped compared to the previous house on the tour, one of those huge luxury abodes in Glenn Dale's upscale Fairwood section. That house, valued at $491,000, had a two-car garage, big skylight and four bedrooms. It had never been lived in despite having been built two years ago, said Boyd Campbell, a local Realtor sponsoring the tour.
Meanwhile, houses were also the topic that day at the YMCA building on Moylan Drive. That was where a free "foreclosure workshop" had been set up for people having trouble with their mortgages. One was a Bowie man, an immigrant, who declined to let his name be used. He'd come to the workshop because mortgage people keep writing him, contending he owes thousands more on the deed of trust to his house in the Heather Hills section. He insisted he'd always made prompt and regular payments on his deed, and went to the workshop to get a free consultation from a lawyer.
Prince George's County has experienced more foreclosures than any other county in the state, according to the Maryland Department of Housing and Community Development. In fiscal 2007, 6,043 foreclosures were filed, compared with 1,244 in fiscal 2006. In Bowie and Mitchellville, foreclosures more than quadrupled in fiscal 2007, to 761, over fiscal 2006, which saw 184 foreclosure actions.
And Maryland experienced a jump in foreclosures of 455 percent in 2007, with 25,109 filings, according to figures released Wednesday by RealtyTrac, a company that keeps an up-to-date database of foreclosures around the country. Nationwide, foreclosures in 2007 rose to well over 2 million, up 75 percent from 2006, according to RealtyTrac.
Observers have blamed a combination of factors from scams to low "teaser" rates on adjustable rate mortgages to the faltering economy. Whatever the cause, in the housing market, someone's pain is someone else's gain.
The 13 people on Saturday's foreclosure bus tour were financially stable enough to be contemplating a new home. The tour started at Campbell's office in Greenbelt, and stopped at three houses in New Carrollton, three in Glenn Dale (two of which had a Bowie mailing address, and one of which was actually a condominium) and, lastly, the Cape Code in the Kenilworth section. The houses ranged from shabby to chic, from a run-down $256,000 rancher in New Carrollton, a residential community that nevertheless has the Capital Beltway and train tracks going right through it, to the nearly half-million dollar luxury home constructed on the picturesque rolling greens of the former Fairwood Turf Farm.
"This is just to kind of pique your interest in a property," Campbell told the bus riders. "You can look at the property ... It's a good tour for anyone buying a home to live in, rent out or flip." By flip he meant, buy low and sell higher.
Bowie resident Jeffrey Bryson was on the bus. He was considering buying a second home and renting it to is nephew, who's getting married and needs a place to live. Bryson is a legal counsel for NeighborWorks in downtown Washington, a congressionally created network of 230 community-based groups that helps low- and moderate-income people buy houses.
"I'm kind of curious about how these foreclosure tours work, they seem to be a new trend," Bryson said during the tour.
Three days later, with more perspective, he concluded that "the tour was educational in a sense. It pointed out how extensive the (foreclosure) problem is. And it showed the banks are really sitting on some terrible properties" such as two ramshackle ranchers in New Carrollton.
The workshop at the YMCA showed a different and more publicized aspect to the local and national foreclosure crisis. Lawyer Mike Morin of the Baltimore-based Civil Justice Network, which ran the workshop and provides free or affordable legal advice to deserving citizens, figured out the immigrant man's problem.
The man took out a mortgage from a large bank that, in turn, sold it to a mortgage servicing company, Morin said. He kept paying the original bank and not the servicing company, causing the latter to threaten foreclosure. At some point, Morin said, "the servicing company realized the mistake and dismissed the foreclosure but has sent bills to the bank for legal fees for the improper foreclosure, and the bank has been, in turn, billing him."
The man's dilemma isn't all that uncommon, Morin said. "For every piece of property, there isn't a damn way to tell who really owns the mortgage or, as it's called in Maryland, the deed of trust.
"Five years ago, that was a small problem. But now, for the most part, nobody knows who actually has the note. That's because they securitize these notes: You've got, say, 5,000 loans and I've got 10,000 loans. And what you do is pool them all into a trust" which makes it impossible to pin down the actual possessor of somebody's mortgage. "In this man's case file, there was a 'lost note affidavit.' That means nobody has any idea who has his note," Morin said.
What is securitization? Morin was asked.
"It's continuing shenanigans on Wall Street, playing games trying to make money out of nothing. It's bureaucracy and stupidity because multiple companies are involved in the same thing," he said.
"In the old days, the Bank of Glen Burnie lends me $100,000 for my house and if they sell the note to M&T after that, I stop paying the Bank of Glen Burnie and start paying M&T. In the old days, there was always a company who had the note, a company you knew about. But now there's an old lender, a new lender, the trust account for the lender, the trustees of the deed and the servicing company for the lender.
"If everything goes correctly, you don't care because you send your check every month to whoever services the loan. But when they screw up, as they did with (the Bowie man), that's when you notice these things," Morin said, after reviewing a big stack of papers the man brought to the workshop.
"The only thing this man has gotten out of the situation is a dismissal of his foreclosure. But now he's being charged for the legal fees for the foreclosure that never should have happened," he said.
Morin said civil justice lawyers are having a hard time keeping up with the sheer number of foreclosures. He said he was arguing a foreclosure-related case in Rockville when he had to stop, turn the case over to his co-counsel, and drive to Hyattsville to prevent an eleventh-hour foreclosure for somebody else.
