Advocates Call for Wall Street Firm to Halt Foreclosures in Baltimore
Struggling homeowners have joined with city council members, UNITE HERE, and United Workers to also demand an end to discriminatory lending practices in the city
JAISAL NOOR, TRNN: In 2005, Sandra Cohen fulfilled her lifelong dream of being a homeowner.
But a few years later that dream died.
An in-home nurse, her patient passed away in 2009 leaving her unemployed.
So, she requested a loan re-modification from Selene Finance who had recently purchased her mortgage.
But it came with a catch.
SANDRA COHEN: They approved me for the modification. They brought my mortgage back down to $800. So I was excited. Thought I was back on the right track. I could afford $800 with no problem. Little did I realize in the year of 2054 that I have a balloon payment attached to my mortgage that’s worth $76,000.
NOOR: Cohen is not alone. She’s just one of hundreds of homeowners still feeling the effects of housing and foreclosure crisis in Baltimore – where as many as 1 in 6 are housing insecure.
PAULA SMITH: [inaud.] decided to force me out of my house. I was foreclosed on and I believe Oaktree has taken possession of my home. My family and I don’t know where to go and where basically we’re going to live at all.
Making it worse, advocates say, is that the home loans were originally owned by the banks responsible for the housing crisis. In many cases it was the likes of Bank of America which settled multimillion dollar lawsuits for targeting African American communities with fraudulent and subprime loans.
Oaktree Capital, which is linked to Selene Finance, purchased these distressed loans from the department of Housing and Urban development at a greatly reduced cost after the financial crisis, according to a report from the union Unite HERE.
ROXIE HERBEKIAN: Routinely, Selene Finance for Oaktree was adding $5,000 and up in some cases $50,000 to the principle value of the homes. So, homeowners had bills that had their monthly payment plus legal fees, plus administration fees, and on and on and on. Basically creating a situation where they’re going to pay forever, like Sandra for these homes, then have a balloon payment and still never end up owning their homes.
NOOR: We reached out to Oaktree and they took issue with the report, saying much of it is “factually wrong,” saying they were in “full compliance” with HUD’s regulations, adding they have “worked with hundreds of these borrowers to keep them in their homes, including forgiving up to $4.5 million in loan principal”. Oaktree would not specify who was receiving the loan forgiveness. They also said they are in the “process of selling more than 150 foreclosed homes at a loss to a community housing organization that will put the homes back into use in the community.” but again refused to name the organization.
JOHN BULLOCK: This is the sheer definition of predatory lending. We are taking advantage of those who can least afford it and having a disparate impact on East and West Baltimore and Baltimore City as a whole.
NOOR: 10 city council members have signed a letter expressing concern over Oaktree’s practices in Baltimore, including newly elected 8th district councilman John Bullock.
BULLOCK: We have to make sure that our city council takes an investigative role as it relates to housing in our city but also that we call upon Oaktree Capital to answer for its work. Also for Selene Finance. Because we’re talking about people, families, real folks who are being deeply effected by this.
NOOR: This is longtime council-person Mary Pat Clarke.
MARY PAT CLARKE: We demand the funded, intended, and just outcomes for 145 of those vacant properties and their displaced families and for families still struggling to hold their ground in mortgage default but not yet in foreclosure. No more foreclosures until we straighten this problem.
NOOR: Advocates say there’s an urgent need for alternative model to address the housing crisis in the city.
ILETHA JOYNES: Where prided real estate markets and speculators are not in control but instead the community is in control through use of community land trusts. As a mother of 2 who is struggling with housing instability, this fair development model will go a long way toward addressing my housing issues and the housing issues of thousands of residents across the city and start to bring stability towards our most vulnerable neighborhoods.
NOOR: Homeowners like Cohen have been fighting an uphill battle for years to keep their houses in Baltimore, the epicenter of the nation’s foreclosure crisis. She says she finds hope that at least now someone is listening.
COHEN: Right now, I feel that at least someone is listening cause for years no one ever heard our story. Everybody saw the destruction around the cities but nobody never heard our stories.
NOOR: For the Real News, this is Jaisal Noor in Baltimore.
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