Small dollar fund supports struggling homeowners

In March of 2020, the federal government issued foreclosure and eviction moratoriums, orders that helped secure housing for renters and homeowners alike during the COVID-19 pandemic. While these policies prevented millions of residents from losing their homes, they expired during the summer and fall of 2021, threatening the housing stability of millions of renters and homeowners who were still behind on bill payments. Community members facing eviction in Baltimore turned to agencies like St. Ambrose for help.

As the pandemic unfolded, our attorneys observed that the forbearances and deferments that lenders offered were helpful stopgaps but they were not permanent solutions and have the potential to create longer-term problems.

Homeowners like Lynne Frankel felt the impacts of this process acutely. Ms. Frankel attempted to work with her lender on her own to resolve her mortgage default and avoid foreclosure. For two years, she struggled to make payments that were double her normal amount, and ultimately could not sustain them. “I felt set up for failure and let down,” said Ms. Frankel, “because they literally said I could afford the payment without a modification.”

This led Ms. Frankel to St. Ambrose. She worked with attorney Owen Jarvis, who helped her secure approval on a loan modification, which would resolve the mortgage default and give her affordable monthly payments. Payments on the new modification were set to begin in a month, and things were looking up; Ms. Frankel was going to save her home from foreclosure once she finalized the modification by making her first payment.

But then disaster struck. In the month before her first payment came due, Ms. Frankel’s sister passed away. She had to fly out of state to help make arrangements and provide care for her nieces. The financial aspect was difficult, but emotionally, Ms. Frankel was dealing with an even greater weight.

“This was a very sad time for our family, coupled with the stressful burden of fighting foreclosure for a second time,” she said. At this point, she had already tried everything to make her finances work. “I had to get a second job again, which caused medical issues, so I had to quit that second job.”

However, just as things seemed dark, St. Ambrose was able to provide a bit of light. Through the SHOW Fund, St. Ambrose was able to pay money directly to Ms. Frankel’s lender to help her afford her other expenses. Upon first hearing that this was possible, she was brought to tears.

“I received assistance with a partial payment of my mortgage so that I could pay for my flight to Wisconsin in support of my nieces and their mother, who was using at-home hospice care due to cancer,” she said. “Owen Jarvis helped stay on top of my lender and helped get my home loan modification approved with an affordable payment.”

Since then, Ms. Frankel’s situation continues to improve. The home she had lived in for 13 years was able to avoid foreclosure.

While the impact of the pandemic will continue to be felt for months and years to come, St. Ambrose will remain an innovative and steadfast resource and navigator for those in need.

“The Most Rewarding Part of My Job”

By: Denitra Braham, Housing Counselor

The most rewarding part of my job is when I assist a person who comes in seemingly hopeless and I help them create a new outlook on their circumstances.

I had the pleasure of assisting an elderly homeowner, Grace*transition from her home and into a senior living facility. When Grace first came in she was insistent about keeping her home, but I knew she couldn’t afford it and she had negative equity, so would not qualify for a reverse mortgage.

I explained to her that it was impossible for her to keep the home, but that she was in no way a failure for no longer being able to make the payments. I told her that she had worked hard her whole life and created a home for her children and herself and now it was time for her to relax and enjoy life stress free. I could tell that she was disappointed, but I encouraged her to take some time to think about our conversation and that I would proceed any way she decided to go.

 

Grace called me a few days later and said she mulled over what we discussed and was able to recognize that transitioning to senior housing would be the best move for her. I connected her with several contacts and resources for senior living and helped her complete the paperwork for a deed in lieu.

At first finding senior accommodations seemed bleak, but the deed in lieu was in progress and time was limited. After 5 months of diligent searching, it did not look like Grace would be able to find an apartment in a retirement home in time. I made some calls to her mortgage company and Grace was persistent in her search as well. Then after another month, everything fell into place.

Grace was able to secure an apartment in the senior retirement home she had originally chosen with a rent of $187.She received her deed in lieu with $10,000 for her transition through the Home Affordable Foreclosure Alternatives program (HAFA), and was given an additional 6 months in her home to pack up and move.

She called me and thanked me for sticking in there with her and encouraging her to make the best decision for her situation. This was one of the most rewarding experiences I have ever had.

*name changed

10 Things to do if You are Facing Foreclosure

Based on MD DHCD 2014 4th quarter Foreclosure report

The St. Ambrose Legal Services department has compiled the following tips for what to do if you’re slipping towards foreclosure: 

1. Ask for help as soon as you realize you are in financial trouble. The sooner you ask, the more likely you are to get the necessary support to resolve the problem.

2. Stay in contact with your bank/lender so that they are aware of your situation. If you are upfront and transparent about your financial situation, your bank will better understand your needs and interests.

3. Do not pay fees for services to assist you with your financial situation when the service is available for free. Thoroughly investigate anyone who is charging you for financial services and what they are doing for the fees.

4. Take advantage of free services! The state and the banks will inform you of free counseling and legal services that are available to you.

5. Do not take advice from friends, neighbors, or family, unless they are trained in financing.

6. Open all of your mail, promptly. Don’t assume you already know what’s inside.

7. There is no way to get out of the debt obligation. Don’t bother looking for a way out. Instead, determine if a loan modification is a viable option for you.

8. Understand your responsibilities under the debt obligation. A deed of trust is the same thing as a mortgage. A deed is the document that transfers ownership of real estate.

9. Know your rights and don’t sign any contracts unless you fully understand the document. You may be offered a ‘friendly foreclosure’ at mediation, but thoroughly research the implications of this sort of agreement before signing any contract.

10. Do not think the problem will just go away. If you cannot afford your house, start considering what next steps you will take in order to find a new living space.

The threat of foreclosure can be intimidating, but being informed of your rights and responsibilities can make the process easier. Going through a foreclosure doesn’t mean losing everything. If you remain informed and proactive throughout the process you’ll be able to salvage the maximum amount of your investment. Find help, resolve the problem, and look ahead to life after foreclosure. Call St. Ambrose for free legal advice and foreclosure counseling: 410-366-8550 

St. Ambrose Takes legal services into the community

Originally Posted in The Daily Record

Joe Surkiewicz
The legal program at St. Ambrose Housing Aid Center isn’t waiting for clients to find its midtown Baltimore office. Instead, the nonprofit is going into the community to solve civil legal problems before they escalate – and with a permanent, brick-and-mortar presence.

Earlier this month, St. Ambrose opened a walk0in clinic at 108 E. 25th St., where people with civil legal problems can get a free 30-minute consultation with a lawyer.

“You can’t sit in an office and wait for low-income people to find you,” said Jeanette Cole, St. Ambrose’s director of legal services. “They face too many hurdles, like transportation or child care. If you don’t get to them, the problems don’t get better. You must address the legal issues early on.”

Since its founding in 1968, St. Ambrose has helped more than 100,000 families with their housing needs, including counseling for first-time home buyers, a home sharing service, rental services, and a home redevelopment program that renovates vacant houses.

Foreclosure services and the legal program counsel people who can’t pay their mortgage and provide direct representation to people in default and facing foreclosure. Increasingly, the legal staff is engaging clients with legal problems that aren’t directly related to housing – but can ultimately lead to economic instability.

The key, Cole said, is getting to them early.

“What we’re seeing is that people get in denial, they get overwhelmed and deny there’s a problem,” she said. “If they knew there’s someone they can ask for help, it can prevent a problem form turning into a disaster.”

One example is payday loans.

“We try to get to them before it turns into a problem,” Cole said. “We try to firm up their financial stability so that their housing remains stable. We meet with them informally or we schedule appointments.”

The new clinic, which will formally open next month with Mayor Stephanie Rawlings-Blake in attendance, is open Monday, Wednesday and Friday from 10 a.m. to 2 p.m.

“I hired an administrative assistant and a community liaison who also works for Councilman Nick Mosby,” Cole said. “He goes to community meetings and is really good at speaking and getting the word out…He’s a live presence in the community.”
Now that the office is staffed and operating, the next step is to meet with churches and schools where St. Ambrose staff can make presentations.

“We go where the clients are,” Cole added. “Although we’re citywide, we’re focused on the neighborhood near our office to help people access legal services. We take it to the and help them with their problems. It’s to help families and the neighborhood.”

Many people who come to St. Ambrose for housing counseling also have legal problems that need to be addressed. “By assisting with whatever needs to be done, we get to them as soon as we can,” Cole said. “It ultimately helps children, families and the neighborhood.”

Schools are also a source of potential clients.

“We’re contacting counselors to see what issues they’re seeing with the children,” Cole said. “We hope to meet with parents before or after school. We’ve prepared lots of educational brochures and show them how to use the People’s Law Library and our online intake.”

With a legal staff of just three lawyers, St. Ambrose is limited in the amount of direct representation it can provide. “We can’t represent everyone,” Cole noted. “We try to identify real problems. We can do something to help them a lot of the time, and then offer education, referrals and advice.”

The legal program will continue its collaboration with the University of Maryland Carey School of Law in providing low-cost legal help to people in the community.

“We’ll continue to work with the JustAdvice program,” Cole said. “We schedule sessions twice a month at The Living Well, a storefront available for community meetings that we rent. Maryland Law students set it up. Sometimes we have 15 people with scheduled appointments.”

Law students are also the focus of new legal clerkships at St. Ambrose.

“It gives them an opportunity to work with clients and shows them the public service aspect of the profession, either so they can pursue a career or use the experience on their resume, Cole said. “It also helps the see the huge demand for pro bono.”

Joe Surkiewicz is director of communications at the Homeless Persons Representation Project in Baltimore. His email is jsurkiewicz@hprplaw.org

Legal Department: Webpage launch & Maryland Daily Record article

Legal Services launched a webpage on Monday, March 18, 2013 that allows clients to complete intake securely online (click above image).

There are exciting things happening in St. Ambrose’s Legal Services program.  On Monday, March 18, 2013 two things occured.  The program launched a new webpage which allows people facing a legal problems to send a question and complete intake securely online.  This was made possible by a grant from the Baltimore Bar Foundation.

Also on Monday, the Legal Department was featured in the Maryland Daily Record in an article by Joe Surkiewicz [Full Article: Subscriber Access Required].  Legal Director Jeanette Cole and Executive Director Gerard Joab were interviewed and quoted in the story:

Getting the legal program on track is Jeanette Cole, who joined St. Ambrose last year as director of legal services.

“The plan is not only to address foreclosure head-on, but to assist people before the problems lead to foreclosure — such as with consumer debt and credit reports,” Cole said. “When people are in financial distress, an appointment to see a lawyer is not always a priority, or even a hurdle they think they have to deal with. So it pays to be proactive. And it helps to have housing counselors, who the clients see first and are often referred to a lawyer here.”

Currently, Cole has one staff attorney and is in the process of hiring another. “We’re going out into the community, working with community organizers and offering a lawyer for free sitting at a desk and talking to clients,” she said.

Preventative issues that can be resolved with the help of a lawyer include helping people get the public benefits they’re entitled to.

Jeanette Cole shared a few recent client stories:

One recent client is a woman who has been raising her grandchild for 10 years. “The father was paying the mother child support, but not the grandmother,” Cole said. “With our assistance, she got the pro se forms and a family law attorney. Now she gets the child support paid directly to her.”

As a result, the grandmother can now afford to move to a safer neighborhood. “This impacts the quality of life for the child,” Cole noted. “That’s not foreclosure work. But it improved the quality of housing and the quality of the child’s life.”

Another result of outreach: “We found a house where rooms are rented and an entire family was living in one room,” Cole said. “We assisted them when the house went into foreclosure. The landlord didn’t tell them! With our help, they weren’t put out on the street.

“Foreclosure is such a final step for people,” Cole added. “Foreclosure prevention is ultimately what we’re about, using housing counselors and lawyers. We help them before things get too bad.”

Regarding the Department’s revamped priorities and intake process:

So far, Cole and her staff are meeting the foreclosure prevention demand. “When people are in distress, you can’t tell them to come back in two weeks,” she said. “It’s important that they know they spoke with a lawyer. We have open intake, not just certain hours.”

The bottom line is direct services to clients.

“It’s important and part of St. Ambrose’s history,” Joab said. “If you need help, this is where you come.”

St. Ambrose Housing Aid Center’s Legal Department can be reached in the following ways:

Online: [click here for webpage] or [click here for online intake]

Email: Legal@stambros.org

Phone: 410-366-8550 x249

Why Foreclosures Threaten Baltimore City Renters

Foreclosure timeline in the State of Maryland.  For more information visit www.MDHope.org.

The foreclosure crisis is predominantly viewed as a crisis of homeownership, primarily affecting homeowners who for any number of reasons cannot afford to stay current on the mortgage.  However, this perception minimizes the fact that areas such as Baltimore City are experiencing a simultaneous crisis of tenancy.

Foreclosures in Baltimore City threaten renters far more than in the rest of the state.  This threat is particularly distressing because a renting family may unknowingly and wrongfully face eviction despite being current on their lease.  Tenants are at extreme risk when landlords do not inform them about foreclosure actions, or when they are not aware of their right to retain possession following a foreclosure sale.  [Information for renters facing foreclosure can be found HERE.]

The scope and implications of the threat to tenants are not immediately evident in the data published by the Maryland Foreclosure Task Force Report in January 2012.  From January to September of 2011, 85% of all Notices of Intent to Foreclose statewide were sent to owner-occupied properties, with the remainder sent to investor-owned properties; likely occupied by renters.  On the surface, this proportional threat to tenants is not striking.

However, in Baltimore City the percentage of notices sent to owner-occupied properties drops to 70%. This number drops further when looking beyond the notices to the foreclosure actions which were actually filed.  St. Ambrose staff recently compiled data on foreclosure actions filed in Baltimore City from September through November of 2012.  Of the 618 foreclosure actions filed during this time, 334 of the properties were not the owners’ principal residence, according to data from the State Department of Assessments and Taxation.  A mere 54% of the properties are owner occupied; the remaining 46% are investment/rental properties.

This data shows that the threat to renters is largely local and entirely real.  A disproportionately large number of Baltimore City foreclosures filings are on properties which were purchased as investments.  Occupying these properties are tenants at risk of being displaced due to foreclosure actions against the landlords.  These tenants comprise over half of Baltimore residents. Census data from 2010 shows that 52% of Baltimore City homes were rented.  The Census counted 296,685 housing units, of which 84% were occupied.  This leaves approximately 250,000 occupied properties, of which 130,000 are rented.  Families in any of these 130,000 properties could be current on their rent and then be shocked to find foreclosure or eviction notices.

There is also a measurable impact of foreclosures on children in these rental properties.  According to recent reports by the Baltimore Neighborhood Indicators Alliance, 2.7% of students in Baltimore City schools were affected by foreclosures in 2009.  Of these children, only 51% lived in owner-occupied properties.  This number was down from 73% in 2005.  The report attributes the increasing impact on children in rental properties to the surge in investment property purchases during the housing boom.

The Task Force Report, much like the nationwide conversation on foreclosures, pays minimal attention to the risks faced by tenants.  The fact is that the impact on tenants is a rarely noted yet extremely troublesome consequence of the foreclosure crisis. The plight of tenants is overshadowed by that of homeowners, but that cannot continue in a city where a foreclosure is just as likely to impact the occupancy of a renter as it is that of a homeowner, where the majority of residents rent, and where the impact on children is so significant.

If you are a renter, know your rights.  Open any and all mail addressed to “All Occupants” or “Current Resident,” as it may relate to a foreclosure action.  Occupants of a property are required to be sent such filings in foreclosure cases.  If a property is active in foreclosure but has not yet been sold at foreclosure, you are still obligated to pay the rent, and the landlord may initiate an eviction proceeding for failure to do so.  You also have the right to remain in the property during the foreclosure action pursuant to your lease, and the landlord must honor the terms of your security deposit in any event.  Following a foreclosure sale, most tenants have the right to remain in the property until the end of their lease.  Tenants renting month to month must be given 90 days notice to vacate.

Foreclosure purchasers who ignore your rights or who are not aware that renters are occupying the property may institute an eviction proceeding.  An eviction may not occur until the court has awarded possession to the foreclosure purchaser following ratification of the sale, and you should be mailed copies of these filings and orders.  Baltimore City occupants will receive notices of eviction by mail 14 days prior to an eviction and by posting on the property 7 days before an eviction.  Residents in other counties may not receive specific notices of the eviction date.

If you have reason to believe your landlord is facing foreclosure, or if you are facing eviction or foreclosure yourself, free legal assistance is available.  Contact St. Ambrose Housing Aid Center – 410-366-8550 – as soon as possible to see how we may be able to assist you.

Gerard Joab’s First 100 Days at St. Ambrose

Gerard Joab, who became St. Ambrose Housing Aid Center’s Executive Director in December, 2011 after founder Vincent Quayle’s departure, has been on the job for a little over three months. I had the opportunity to meet with him last Thursday to see how it was going.

Though his last job was in New Jersey, Joab’s beginnings were in Baltimore, so there’s a sense that he is coming home. In New Jersey, Joab was the Executive Director of the Local Initiatives Support Corporation (LISC) of Greater Newark and Jersey City. LISC provides funding and technical assistance for community development corporations. As director at LISC, Joab facilitated funding and support to organizations like St. Ambrose. Thus, he has an intricate understanding of the funding processes these organizations undergo as well as the obstacles they may face, and ultimately the elements necessary for success.

Joab has been taking the first few months as Executive Director to “learn, learn, learn”. While reacquainting himself with Baltimore, Joab is also getting familiar with the programs available at St. Ambrose and is continuously impressed by the depth and breadth of services available. “It is important to hold on to and affirm the history of St. Ambrose,” says Joab, indicating that there are no plans to make programmatic changes. He wants to reassure the community that St. Ambrose will continue to be a strong presence in the Baltimore community and a wealth of resources for all. Joab is eager to share the good news of the strength and diversity of St. Ambrose’s services, and offers a warm welcome to all those interested in participating and partnering.

As Joab explores the program offerings, he has seen how and why specific programs are utilized. He explains how the foreclosure prevention program has become one of St. Ambrose’s premier programs in recent times. “Because of the economic environment, foreclosure has been front and center”. In addition to foreclosure prevention, St. Ambrose excels in managing 300 rental sites across the city and in Baltimore County with the belief that quality rental opportunities lead to neighborhood stabilization. Another neighborhood stabilization program that stands out at St. Ambrose is Homesharing, which provides a unique and innovative approach to community building and strengthening neighborhoods. Homesharing, which helps homeowners stay in their homes, can stave off foreclosure and make houses more affordable.

The commitment to housing is palpable, but to everyone at St. Ambrose Housing Aid Center, a home is more than a house. It’s a house in a stable, strong, and supportive community where people can live, learn, work, and grow, where dreams can be had and goals can be achieved, where children are safe and have access to more opportunities than their parents.

After 100 days as the new Executive Director of St. Ambrose Housing Aid Center, Gerard Joab is full of energy, enthusiasm, and experience. “Everything that I’ve done has prepared me for today and what I do today will prepare me for tomorrow,” he says.

From WBAL: “Candidates Vow to Rehab Vacant Property”

Image Source: WBAL

The network apparently asked mayoral candidates to weigh in on the issue.  From what we can tell, they received at least one response, from Frank Conaway, Sr., pasted below:

We need to conduct triage on our inventory of vacant and blighted properties. Properties that are in viable locations should be fixed if they are city owned, or acquired through condemnation if they are privately owned and repaired for occupancy. In areas where the neighborhoods are on the borderline between viability and failure, we should have a broader strategy to acquire multiple properties and rehab them in groups. We need to acknowledge that there are some houses that are not suitable for rehab. These properties should be razed. No one in Baltimore has wanted to deal with this reality, but the truth is that some areas are beyond repair and need to be redone from the ground up.

The Debt Ceiling and Housing

Source: Center for American Progress

August 2nd.  The day looms over the American public drearily, as failed negotiations leading up to the imposing government debt deadline make the possibility that the United State will default on its debt all the more likely.  We have heard from pundits and economists that the consequences would be devastating, that inflation would soar and unemployment would also increase, all while spiraling the U.S. economy into a double-dip, “U-shaped” recession.  The consequences of default on some facets of the U.S. economy seem more apparent than others, like the demand for government issued securities and the market for our bonds.  Among all of the apocalyptic speculation about what would happen if we defaulted, however, little commentary has emerged focusing on the housing market.

However, Christian Weller of the Washington-based Center for American Progress, a left-of-center think tank, had already analyzed the effects that a potential default would have on the housing market as early as last May. Now, Weller’s analysis seems all too apropos, as default increasingly looks like it could be a real possibility.  Back in May, long before most analysts even considered a default scenario, Weller wrote in a CAP brief that “if Congress fails to raise that ceiling then the U.S. housing market would most likely experience a severe double-dip contraction marked by lower housing sales and depressed home prices.”  It turns out, albeit not surprisingly, that the potential downgrade of treasury securities and the depressed market for government issued bonds could have a devastating effect on the housing market as well.

The brief goes on to outline six main contentions as to what a default would mean for housing: 1) mortgage interest rates will rise more than U.S. Treasury rates; 2) mortgage rate will remain high for some time; 3) new home sales could drop to record lows; 4) existing home sales will decrease;  5) housing prices will drop in the wake of fewer sales; and finally, 6) the economy will suffer.

Throughout the analysis, a subtly consistent point emerges: mortgage rates are directly tied to treasury interest rates, and thus, higher treasury interests would translate to higher mortgage rates.  Because U.S. government debt is perceived to be an almost risk-free investment, a default would very likely increase the interest rate on U.S. Treasury bonds.  As the table above shows, the correlation with between increased debt and higher mortgage rates are staggering.

But what’s worse, according to Weller, “the assumption is that even if the debt ceiling is not raised in August, members of Congress will eventually come to a budget agreement to pay for the government’s operations and pay the outstanding debt.”  However, even a temporary default will have an impact a major, perhaps permanent impact on interest rates, as investors, for the first time, will associate risk with U.S. debt.

While all of this may come across as overly abstract and theoretical, the effect that a default will have on the housing market, and more specifically, on St. Ambrose and the Baltimore community, will be huge.  To name just one example, much of revenue that helps fund our operation here in Baltimore comes from home sales [hyperlink], as our inventory of competitively-priced, high quality homes in the Baltimore area has long been an asset building and neighborhood stabilizing resource for low and middle income homeowners of Baltimore City.  With higher mortgage rates, however, fewer and fewer families would realistically be able to secure a home loan that may fund even our modest properties.  This fact coupled with the recent news that a median income Baltimore resident may be unable to afford a Baltimore home makes the prospect of a default significant.

Beyond this, our foreclosure prevention department, which is swamped with cases, would certainly have to shoulder an increase in clients.  More foreclosure and less affordable housing means more vacant properties, depressed mean home values in neighborhoods, and depleting household equity for Baltimore families.  In total, the effect on our community would be devastating, and we hope that our two major political parties will find a way to stave off this disaster.  Time will tell.

NYT: Backlog of Cases Gives a Reprieve on Foreclosures

The Map Above Shows the Average Number of Days that Loans Have Been in Default, By County (Source: New York Times)

By Anne B. Norton and Harsha Sekar

A few days ago, the New York Times presented yet another angle of the chaotic and disorganized foreclosure crisis, a maelstrom that has revealed, among other things, poor ethical practices and other bizarre behaviors on the part of both homeowners and lenders.  Apparently, the backlog of foreclosures is now so extensive that mortgage servicers may be delaying the process altogether.  In some cases, this practice (or lack thereof) has conferred legitimate relief upon buyers, who are able to continue living in their homes.  In others, buyers have taken advantage of stalled foreclosure processes, strategically defaulting on their loans.  The Times reports that some homeowners have even discovered creative (yet unscrupulous) was to earn a profit off of their foreclosure, one of the more shocking news items we’ve come across.

The Times explains the magnitude of the crisis straightforwardly:

In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.

Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.

The Times goes onto distinguish states which mandate that foreclosures be filed in court versus those that do not (and states are more or less evenly divided throughout the country).  “The pace is much more brisk,” in states that bypass the court process, declares the paper, “three years in California, two years in Colorado and Nevada.” According to a foreclosure lawyer to whom the Times was able to speak, “banks aren’t trying to win.”  While the banks, in a strong effort to mitigate the understandable concerns of investors that may purchased their assets, have categorically denied allegations that they have made any attempts to intentionally prolong foreclosures.

Perhaps not surprisingly, while the new phenomenon is a relief for those less fortunate, certain people have chosen to take advantage of the situation:

Mr. Stopa, the Florida lawyer, said he divided his clients into three groups. Some are unemployed or disabled and just getting by. Others are able to save money and improve their financial situation as their case drags on. The third group are those who have strategically defaulted. They can afford to pay but are taking advantage of the banks’ plodding pace. Often the members of this group rent out the foreclosed home and keep the proceeds.

While so much of the coverage of the foreclosure crisis has emphasized ordinary American families that have fallen on hard times, here, we get a rather appalling glimpse of another, new side of the equation.

Is the backlog for real, and what does this all mean in the grander scheme, one might ask?  In total, the Times definitely delivers a few valid points in terms of delay.  The process in NY will be substantially longer due to the judicial process that can take more than 500 days to complete if there was no backlog and no objections to the foreclosure sale filed.  As for locally, there is no question that there is backlog of foreclosures in Maryland thanks to the July 1, 2010 mediation law followed by robo-signing followed by new changes to the mediation law coming soon as well as a looming settlement with the OCC, DOJ/AG group and state bank regulators.  The state’s Foreclosure Bar has said that there largest national bank clients have 10’s of 1,000’s of loans in the pipeline that are waiting for some of the uncertainty to resolve.

Everyone’s hope is that the economy will start to pick up a little as the filings start to move through the system and that certain changes in servicing make it more likely that the homeowners in line for foreclosure will find relief.  But, without clearing the market of the foreclosure inventory, can there be a true economic recovery? We’re not certain.