OBAMA'S POLICIES HAVE DELIBERATELY CREATED THE ENVIRONMENT TO HAND ALL REAL ESTATE TO THE WEALTHY. IT WAS PLANNED AND IT IS ALL ILLEGAL. FOR THOSE MIDDLE-CLASS ABLE TO KEEP YOURS---WHAT HAPPENS WHEN RULE OF LAW IS IGNORED?
IT GOES AFTER EVERYONE! DO YOU KNOW THAT MORE WOMEN/SENIORS AND CHILDREN SUFFER FROM THIS FRAUD AND ITS LACK OF JUSTICE THAN ANYTHING IN RECENT HISTORY?
THE MARYLAND ATTORNEY GENERAL IGNORING ALL OF THIS -----DOUG GANSLER -----IS NOW RUNNING FOR GOVERNOR. AIDING AND ABETTING CRIME AND STILL RUNNING FOR PUBLIC OFFICE!
Have you noticed the market on housing has been climbing these few years with the FED's QE mortgage bond buying moving interest rates to zero? Did you know that all that buying is a result of bundled foreclosures bought by the investment firms enriched by creating the massive subprime mortgage fraud? Did you know the other group buying are foreign and wealthy? Did you know that these same investment banks/firms have yet to lend to small businesses and individuals so none of the people impoverished by these frauds has been able to buy homes at these lowest interest rates ever?
What has happened during Obama's term besides the massive frauds remaining in the hands of the fraudsters is that a massive movement of investment wealth created from those stolen funds has caused wealth at the top to sky-rocket.
OBAMA SAYS HE IS GOING TO START TO WORK FOR THE MIDDLE-CLASS NOW!
More importantly for middle/working class America is that all of the US housing and real estate has been transferred to those 1% and now we have POTTERSVILLE landlords as rental houses. All this happened with suspended Rule of Law. Those investment firms should not have had the money to do this and the FED should never have been allowed to use crony and corrupt policy to expand this wealth.....AND THAT IS ALL THIS IS!
WE CAN REVERSE THIS BY SIMPLY REINSTATING RULE OF LAW AND CLAIMING ALL THESE HOUSING INVESTMENTS AS RECOVERY OF FRAUD! WE MUST DO THIS OR MOST PEOPLE WILL BE CRUSHED BY RISING RENTALS!
This housing bubble for the rich is of course far more dark than this! We know that the subprime loan fraud targeted the poor and working class and the middle-class was drawn into it with the extended stagnation. But cities all across the country and Baltimore especially are working to force people into foreclosure and handing over property to the city often by illegal means. It is incredible to think a US government would openly commit fraud to get hold of people's property, but that is what is happening in Baltimore. It is all part of this drive to hand control of all real estate to these few people at the top and that is especially so in urban areas like Baltimore. The city is creating wide bundles of real estate taking much of low-income communities and handing them to these investors that then rehab and rent at huge profit and control who lives in an area by rent prices. Keep in mind that the people victimized by these frauds have gotten little or nothing and often are homeless because no justice came!
Dec. 20, 2013, 12:49 p.m. EST
All-cash home sales reach new high Why the Fed tapering may help drive more all-cash buyers
By Quentin Fottrell, MarketWatch
More Americans are buying homes in all-cash deals, according to a new report. But real-estate experts say this increase may not be a good sign for the health of the housing market, which may also be impacted by the Federal Reserve’s decision to pull back on its bond-buying program.
Bloomberg All-cash purchases accounted for 42% of all sales of residential property in November 2013, up from 39% during the previous month, according to data from real-estate data firm RealtyTrac released Friday. “This is still a very cash- and investor-driven market,” says Daren Blomquist, vice president at RealtyTrac.
The cities with the biggest month-over-month jumps in the number of all-cash sales, according to RealtyTrac, included Florida (63%), Georgia and Nevada (both 51%), South Carolina (50%) and Michigan (49%). This helped boost overall sales of U.S. residential properties, which sold at an annualized pace of 5.1 million in November 2013, a 1% increase from the previous month and a rise of 10% from a year ago.
The decision by the Federal Reserve Wednesday to reduce its bond-buying program to $75 billion per month starting in January, from $85 billion per month currently, may also encourage more cash-purchases — at least for those who can afford it, Blomquist says. “They’re going to do everything they can to keep interest rates low, which may be tough to do,” he says. To reduce cash buyers, he says there will need to be low interest rates and a cooling off in home price appreciation. “Otherwise, you’ll see the market skew even further toward cash buyers,” Blomquist says.
When interest rates went up slightly in June, there was a notable increase in cash sales, Daren Blomquist says. “Some markets are more interest-rate sensitive than others based on affordability,” he says. “Just a slight increase makes homes a lot less affordable.” In fact, another report by Goldman Sachs in August was even more strongly in the cash-is-king camp, estimating that cash sales now account for 57% of all residential home sales versus 19% in 2005. Walt Molony, a spokesman for the National Association of Realtors, says that the association’s estimate of the share of the market made up by all-cash buyers is lower than others’, at 31% in July, but that it’s still at an all-time high.
Molony says that investors make up 32% of all-cash buyers (70% of all investors pay cash), up from 31% in October and 30% in November 2012, while retirees who’ve built up equity in their homes or paid off their mortgages account for around 12%. The rest include vacation-home buyers and foreign buyers.
While cash buys help explain the surge in home sales over the past year, some experts say it’s an unsustainable trend — and one that should be greeted with caution. “The rise in cash sales is not a good long-term trend for the housing market,” Blomquist says. Although RealtyTrac doesn’t identify who has cash-in-hand, experts say wealthy Americans and downsizing retirees account for some of these all-cash deals. Investors who are keen to make a profit by buying low and renting those properties — or flipping them — also drive up the number of all-cash deals, he says. None of these three groups — flippers, retirees and the wealthy — are big enough to sustain the market in the long run, he says. If it remains dominant in the long run, cash buying “will have a chilling effect on home sales and prices,” Blomquist says.
If tapering does lead to higher mortgage rates, some home buyers might buy with cash rather than a mortgage, says Jed Kolko, chief economist for real-estate firm Trulia. However, many cash buyers are investors, and now that prices have risen, investor activity is also starting to decline, he says. (House prices in 20 American cities rose more than 13% in the 12 months leading up to September, according to the S&P/Case-Shiller index of property values, the biggest rise since February 2006.) “On balance, the all-cash share of purchases will probably decline next year, as fading investor activity outweighs the impact of higher rates.”
Another challenge for the housing market in 2014: The pool of potential buyers is being limited thanks to a combination of tight lending standards and rising interest rates, experts say. “Cash is king in hot markets where getting the sale done now matters and where investors are driving price recovery,” says Susan M. Wachter, professor of real estate and finance at The Wharton School at the University of Pennsylvania. Cash’s dominance is a sign of the fact that it’s more costly and hard to get financing, she says, “that’s a bad thing.” On the upside, interest rates are still historically low, she says. “Now is a time to lock in if you are a buyer.”
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Now, if you followed this debacle you would know it is no accident that bills from hundreds to thousands went out to city residents and when people complained about the faulty bills they were ignored. This was huge and it was devastating to low-income people who were not able to pay and then fight. They were thrown from their houses for what was the city's faulty billing.
The reason I say it is deliberate is that I became involved with a few of these and found the Water Department openly acting deceitfully in trying to retain the money they knew was overbilling. I also know it had to do with development because the people losing their homes were heavily found in Enterprise development zones.
THE CITY OF BALTIMORE ACTUALLY COMMITTED FRAUD TO GET PEOPLE OUT OF THEIR HOUSES AND THEN GAVE THOSE HOUSES TO DEVELOPERS FOR PENNIES ON THE DOLLAR.
None of this is legal and it can be reversed by simply reinstating Rule of Law!
Moratorium Proposed On Water Bill-Based Property Liens Baltimore City Council President Cites Audit Uncovering Billing System Flaws UPDATED 9:15 AM EST Mar 06, 2012 Baltimore Sun
Young introduced a resolution requiring a moratorium on placing liens against properties based solely on unpaid water and sewer bills.
The audit revealed that more than 38,000 customers were overbilled, totaling $4.3 million, while some customers weren't billed at all.
Young said he wants the moratorium in place for two years or until a "viable and fair" billing system is created.
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Now, the problem with Baltimore City water billing is that most of the public workers have been dismissed and they are using what they call averaging....never knowing what people actually use. THE PROBLEM IS STAFFING YET THEY ARE TELLING US THE SOLUTION IS SMART METERS. Now, those who follow me know the problem with Smart Meters but what can be said simply is that the same corporations defrauding us right and left are behind Smart Meters!
All this has to do with the article above that says the housing market is climbing and cash payments are fueling it. These homes go into foreclosure because they cannot pay thousands of dollars for water and then the rich come in and pay cash for these stressed homes. If you think this is all accident-----THEN WHY ARE THESE CASES NOT FIXED IMMEDIATELY? This is not simply a case of dishonest water department employees-----this is from City Hall!
Unpaid Water Bills Leading to Foreclosed Homes
Nov. 12, 2012 By MARK GREENBLATT, GERRY WAGSCHAL, and LAUREN PEARLE Mark Greenblatt
Actor and musician Richard Burton is facing foreclosure on his Baltimore home, but not because he didn't pay his mortgage on time. In his case, he says it all began with an overdue $1,037.42 water bill.
Burton lost his job playing "Shamrock" McGinty on HBO's "The Wire" when the show went off the air. He couldn't afford the bill and claims it was incorrectly inflated to begin with.
However, the cash-strapped city of Baltimore turned to a controversial way to collect. The city sold his unpaid debt to a private company that also inherited a lien on Burton's home. Then, the company tacked on 18 percent interest and more than $2,000 in legal charges.
"You have no choice but to pay or you lose your home, that can't be right," Burton said.
A Colorado Springs-based company called LienLogic is trying to foreclose on Burton's home if he doesn't pay.
The National Consumer Law Center (NCLC) says thousands of homeowners all over the U.S. are threatened with foreclosure every year because of unpaid utility bills.
"Someone could actually lose their home for the failure to pay a $200 or $300 water bill or sewer bill," said John Rao, an attorney with the NCLC.
The NCLC released a report this year citing a Rhode Island senior citizen who fell behind on a $474 sewer bill. A private company took possession of the home she had lived in for 40 years, only to turn around and sell it for $85,000.
Back in Baltimore, Vicki Valentine lost her home over a partially paid water bill. Her family had the home for 33 years. She took possession after her father passed away. Valentine sank into a serious depression following that death and paid the wrong amount on her bill. When she tried to make payments to catch up, they were not enough, and the city sold her debt off as well.
Eventually, Valentine lost the home and says she ended up on the streets.
"And that's not a fun place to be," she said.
LienLogic, the company that bought Richard Burton's debt, makes $100 million a year from its lien business, which it operates in multiple states.
The company initially declined an interview with ABC News, forwarding us to the National Tax Lien Association for comment. The executive director of that organization agreed to an interview, and then backed out.
So ABC News flew to Colorado and tracked down one of LienLogic's co-founders, Erik Carlson. When approached by an ABC News reporter, Carlson would only say: "Like I said, I declined the interview."
ABC News followed up, but Carlson declined to answer our questions about people his company tries to take homes from following the non-payment of small water or sewer bills.
Not all cities sell unpaid debts to private companies. In Houston if you don't pay your water bill, the city will shut your water off and try to get you help. Officials there would never give someone the potential right to take your home away if you don't pay.
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Edgemere Man Receives $15,000 Water Bill
WBFF News
A Baltimore man is stunned by a $15,000 water bill that he says he does not owe. Otto Hart received a delinquent notice Monday morning at his home in Edgemere saying he owes over $15,000. Hart says his water bills average about $25-$30 a quarter but in June he was mistakenly billed $96. After speaking with the Department of Public Works about the mistake, he got a bill for $0 in September after an adjustment. Now, three months later, a delinquent notice for $15,000. But this time when he contacted Public Works, he was told that the matter would be forwarded to another department to be investigating and someone would contact him in 4-6 weeks. "Well, if you owe money, within 4 to 6 weeks, a lot can happen. I mean, you could basically end up having a lien put on your house or your credit could go right down the tubes and there's nothing you can do about it," Hart said. A spokesman with the Baltimore City Department of Public Works says the billing department is reviewing the matter.
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Below you see residents donating their homes for the cost of a few hundred in taxes and property bills. These homeowners have no chance in selling homes without the city's investment in their communities and the subprime loan fraud settlement should have done that. Rather than rehab and sell cheaply to low-income people having lost their homes....the only choice for the existing homeowners in blighted communities is to hand over these houses for nothing to be handed to rich developers.
IT IS THE SAME PEOPLE WHO CREATED THIS SUBPRIME MORTGAGE FRAUD AND WAS ENRICHED BY IT THAT ARE COMING IN AND BUYING ALL THIS CITY REAL ESTATE AND CITY HALL USES THESE WATER BILL SCHEMES TO GET EVEN MORE!
All of this can be reversed by simply reinstating Rule of Law. All these homes in these blocks of real estate should go to those losing their homes to fraud!
Woman’s Home Confiscated Over Small Water Bill
The Other Foreclosure Menace
By Fred Schulte, Ben Protess and Lagan Sebert
May 21, 2010 "Huffington Post Investigative Fund" -- One raw day in early February, Vicki Valentine stood by helplessly as real estate investors snatched her West Baltimore home over what began with an unpaid city water bill of $362.As snow threatened to fall, she watched a work crew hired by the new owners punch out the lock on her front door. A sheriff's deputy was on the scene while Valentine and her teenage son piled whatever they could into a borrowed car.
Running out of time, Valentine scrambled to pack up clothing and mementos. The home had been her family's for nearly three decades, and her father had paid off the mortgage in 1984. "It's hard to say goodbye to this house," she said. "It's like someone forcing you out of something that belongs to you. I don't get it."
Valentine lost the two-story brick row home after the city sold her debt to investors through a contentious and byzantine legal process called a "tax sale." This little-known type of foreclosure can enrich investors as growing numbers of property owners struggle to pay their bills.
WATCH Vicki Valentine's Eviction Day:
These foreclosed homeowners are not the families making headlines for taking on mortgages they could ill afford. Families ensnared in the tax sale sometimes are unable to overcome relatively small debts owed to local tax collectors.
Rather than collect the overdue money they are owed, many local governments are selling tax liens. Buyers range from behemoths such as JPMorgan Chase & Co, and some regional banks and law firms, to small-fry investors lured by late-night television commercials promising quick riches. Investors generally bid in an auction for the right to collect delinquent taxes and other municipal debts on property owners, sometimes by paying only a few hundred dollars. When owners can't pay, investors can pick up property at bargain prices
It can be a good deal for everyone except the property owner. Selling the debts to investors can help governments efficiently ease budget woes without having the added expenses of debt collection, foreclosing and being a landlord.
Investors, meanwhile, can rake in hefty profits. That's because they can tack on fees and steep interest rates, which can amount to 18 percent annually in Baltimore.
In Valentine's case, legal fees and other charges climbed past $3,600 - nearly 10 times her original bill.
Investors purchased an estimated $30 billion of real estate tax debt held by governments across the country in 2009, double the amount a year earlier, according to the Florida-based National Tax Lien Association. Altogether, 29 states and the District of Columbia can sell tax lien debt to investors.
Lien sales in Baltimore have nearly doubled since the housing bubble of 2006. On Monday, the city sold 12,689 liens - a probable record. Properties ranged from boarded-up shells and vacant lots to row homes in gentrified neighborhoods and some commercial buildings.
Last February, Vicki Valentine was evicted when she couldn't pay $3,603.41 to rescue her Baltimore home. Valentine's wasn't a typical foreclosure -- the mortgage was paid off. But when she failed to pay a $362.28 water bill, the city auctioned her debt off in a tax lien sale. An investor now owns her home. City records show that one in five of these liens on properties is for unpaid taxes or other municipal bills amounting to $1,000 or less. If Baltimore's 2009 tax sale is any indication, hundreds will stem from delinquent water bills; there were 666 such liens last year.
Although the brisk tax lien trade thrives beneath the radar, largely unnoticed, it has occasionally drawn scrutiny from law enforcement authorities.
Some of Maryland's most prominent tax sale investors have been swept up in a criminal investigation into bid rigging at the sales. Federal prosecutors allege that those investors agreed in advance which properties to bid at some auctions, improperly reducing the money earned by municipalities.
So far, Justice Department prosecutors have secured three convictions in the ongoing investigation. At a May 4 sentencing hearing for two of the defendants, a witness for the government was lawyer John Reiff, part-owner of the company that currently owns Valentine's lien. He was not charged in the case.
Investing in liens can be risky, with profit on a particular property anything but certain. Investors generally compensate for such uncertainty by buying in large volumes, sometimes at a clip of thousands of liens each year.
Two of the investors who pleaded guilty in the bid rigging case made at least $10 million from fees and other costs collected from owners of some 6,000 property liens they bought over six years, according to federal prosecutors.
Prosecutors said in court filings they suspect bid-rigging occurs in other areas of the country. A JPMorgan subsidiary called Xspand and at least two other companies received grand jury subpoenas last year as part of a Justice Department anti-trust investigation in New Jersey, according to Bloomberg.
'Unintended Consequences'
Some state lawmakers have questioned the fairness of the tax sale foreclosure process, which often sticks homeowners with thousands of dollars in legal fees and other costs. But cities and counties in Maryland earlier this year fended off an effort to keep water bills out of the tax sale, arguing that without the threat of losing homes many people would fail to pay their bills.
Revenue collectors defend their tax sales as a necessary, if sometimes distasteful, means for feeding the public treasury. In aging cities such as Baltimore, there's also hope that new owners will rehab decaying or abandoned properties, restoring them to the tax rolls.
Investors say they aren't the bad guys - they're providing a service that helps plug holes in municipal budgets. Homeowners should face consequences for failing to pay their bills, they argue, noting that people faced with losing property have many opportunities to redeem it. The mounting fees, they say, reflect the costs involved in navigating complex legal requirements, tracking down property owners and taking them to court to enforce the liens. In Valentine's case, they noted, a judge approved the fees.
"We are essentially the city's bill collector," said lawyer and tax lien investor Reiff.
Critics of tax sales question the morality of government tax collectors acting to enrich private investors at the expense of property owners with low incomes or facing hard times. They ask whether it's the best way to compel people to honor their debts -- especially involving relatively paltry public utility bills.
After all, when water bills go unpaid, some cities and counties simply shut off service. In Baltimore, officials often leave it on. Another alternative would be to have private collection agencies track down debtors.
"This is a case where good intentions have led to severe unintended consequences," said Debra Gardner, of the Public Justice Center in Baltimore, a non-profit advocacy group for minorities and the poor.
Asked about Valentine's story, David Vladeck, director the Federal Trade Commission's Bureau of Consumer Protection in Washington, said it was "just horrifying to me."
While noting that his comments did not reflect agency policy, Vladeck said he believed more recession-wracked homeowners across the country could face a similar plight. "It's beyond tragic that this poor woman lost her home."
Pleas - and More Fees
Valentine was incredulous when the price to keep her property shot past $3,600. Jobless and lacking the savings to pay, she said she could do little to stave off the day of reckoning.
That day arrived on February 3, when a Baltimore City Sheriff's Department deputy served her with a court-issued "writ of possession" stripping her claim to the home.
Valentine, a former mental health counselor and rehab specialist with four children, said she moved back to her childhood home about a decade ago to care for her ailing father, Charles L. Turner. A retired brewery worker, he had Alzheimer's disease.
As his condition worsened, he tended to hide bills from the family. (City records confirm that Turner often fell behind in meeting his obligations during the final years of his life and nearly wound up in the tax sale as early as 2000 over unpaid water bills and property taxes.)
When her father died in 2003, Valentine took over the home and stayed there with her son, Dimitrian, now 17. She said she fell into a serious depression in the wake of her father's deteriorating health and death, and was unable to work or pay her bills on time. She has worked only sporadically since his death. Though she made partial payments on the water and sewer account in 2006, she acknowledges her failure to pay a bill of $462.28 in full. She went down to city hall and paid $100, but never took care of the balance.
When the deadline passed for paying up, the city added 2005-2006 property taxes of $287.92, interest and city tax-sale processing charges. That brought the total she owed to $710.57, according to city records.
The City of Baltimore washed its hands of Valentine's debt in May 2006 when it sold the lien to Sunrise Atlantic LLC, an arm of the BankAtlantic in Fort Lauderdale. The Florida bank has bid on tax liens in a range of states, from Florida to Illinois, though it has largely sold off its Maryland lien portfolio and is not implicated in the bid-rigging case. BankAtlantic did not return phone calls seeking comment.
Unlike mortgage foreclosures initiated by banks, there's no appealing a tax sale debt once it is sold off; a property owner has no option other than to abide by the investors' terms and pay the fees. The lien holders also have little incentive to be flexible about repayment terms.
Maryland law gives property owners six months to redeem a tax lien with only minimal added costs. But if they don't pay by then, lien holders can sue to seize the property and stick the homeowner with a slew of fees, including legal bills incurred in taking the matter to court. Sunrise Atlantic filed such a case on Valentine's home in Baltimore City Circuit Court in December 2006, records show.
More than a year later, the court awarded the property to Sunrise Atlantic.
At that point, Valentine sent a handwritten letter to the court, begging for mercy and more time to repay.
In the letter, dated Feb. 9, 2008, Valentine described being unable to work because of depression and other problems. "For now, this is the roof over my son and my head. I am trying to get the money together to catch up on my delinquent bills." She added: "Please allow more time to pay all bills connected with the foreclosure of said property."
But the longer she waited and the more she protested, the more legal fees and other charges she incurred.
In 2008, Baltimore attorney Anthony De Laurentis, who represented Sunrise Atlantic, submitted itemized charges to the court: $305.91 in interest on the lien; a $1,500 bill for responding to Valentine's requests to cut the fees and other legal work; more than $1,000 in assorted expenses, including $325 for a title search of the property and $79 for photocopies, according to court records.
The price list passed muster with a judge, who on Sept. 19, 2008 ordered that Valentine pay $3,603.41 - or forfeit her property.
She asked for another hearing, which delayed the process for more than a year.
While the case dragged on, the Florida bank started divesting its tax lien certificates from Maryland, eventually transferring the lien on Valentine's home to a firm called Montego Bay Properties. Part of the firm is owned by a trust set up to benefit members of the family of lawyer De Laurentis. Reiff, one of De Laurentis' law partners, also owns part of the firm.
In an interview in their Baltimore office, De Laurentis and Reiff said 90 percent or more of property owners eventually pay whatever is necessary to keep their homes.
They said most of the properties they take over are vacant and thus nobody is displaced. They also said they had repeatedly tried to settle the matter with Valentine and showed Investigative Fund reporters a thick file of court papers and other records as well as notes of more than a dozen contacts with her to make arrangements to clear the debt.
"We bent over backwards for her," Reiff said, adding that his staff had tried for more than two years to "work something out" to no avail.
Feds Say Bids Rigged
Though Valentine had no way of knowing it, some investors rigged the 2006 Baltimore tax sale auction that led to her eviction, federal prosecutors alleged in court.
The roots of that conspiracy run deep, prosecutors said. For years, a handful of Baltimore real estate lawyers and their investment partners quietly dominated Maryland tax sale auctions, with few questions asked about their bidding tactics or collection policies.
That changed after The Baltimore Sun used city records and court filings to report in March 2007 that hundreds of mainly low-income city residents had been kicked out of their homes over small unpaid bills, ranging from water and sewer charges to minor environmental citations. Some people were driven from family property because they couldn't afford to pay thousands of dollars demanded by lien holders.
The Baltimore newspaper also documented for the first time that while dozens of parties bid in Baltimore tax auctions in 2006 and 2007, just three investment groups had won about two-thirds of the liens.
Prosecutors went on to charge three men with conspiring to rig bids at 21 auctions in Baltimore and four other jurisdictions, including Montgomery and Prince George's counties in the suburbs of Washington D.C. between 2002 and 2007. All three have since pleaded guilty. No other charges have been filed.
Another investment group involved in the conspiracy was DRT Fund, according to court filings by federal prosecutors. DRT is owned in part by De Laurentis and Reiff. DRT participated in a dozen of the 21 fixed auctions, though not the Baltimore City auction in 2006 in which Valentine's lien was sold, according to court filings.
The Justice Department filed no charges against DRT, which came forward in the fall of 2007 and "fully and truthfully reported their own wrongdoing and that of their co-conspirators and terminated their part in the conspiracy," prosecutors wrote in court papers filed last month.
DRT went on to sign an amnesty agreement with the Justice Department that commits it to "pay restitution to any person or entity injured as a result of the bid-rigging activity being reported in which it was a participant," court records state.
Neither De Laurentis nor Reiff would discuss DRT's settlement with the Justice Department.
Water Bill Woes
Some lawmakers have tried for years, with modest success, to rein in the tax-sale fees that can steamroll low-income homeowners. Maryland legislators passed a bill in 2008 that raised the minimum lien sold from $100 to $250. But a bill to prohibit cities and counties from selling delinquent water bills to investors failed in the state Senate earlier this year by a single vote.
Legislators also rejected a bill that would have prevented the sale of any lien of less than $750, as happens in some other locales outside of the state.
Both bills failed, lawmakers said, largely due to fierce opposition from tax collectors and officials in Baltimore, which conducts the largest tax sale in the state.
Andrea Mansfield, of the Maryland Association of Counties, testified that the tax sale process provides "a much-needed device to ensure that property owners remit payment for their fair share of taxes and charges connected to public services."
Eliminating water bills from the tax sales would result in more "deficient accounts," and lead to "increased rates on citizens who properly pay," she wrote.
Sen. James Brochin, a Democrat from Baltimore County who co-sponsored the legislation that would have banned the sale of delinquent water bills to investors, vehemently disagrees. "It's just disgusting. It's highway robbery. It's dead wrong. It's immoral," he said.
While city officials publicly defend the practice, he said, in reality "they're humiliated and embarrassed by it. Deep down they know how immoral it is."
Baltimore's mayor, Stephanie Rawlings-Blake, declined requests for an interview on the topic with the Investigative Fund.
City officials were more talkative earlier this year when they sought to block lawmakers from banning the sale of water bill liens. Mary Pat Fannon, a lobbyist for the mayor's office, said in prepared testimony for a February 5 hearing that the city had begun offering repayment plans for water bills to help homeowners avoid tax sale.
She said that the 666 water bill liens sold by Baltimore City in 2009 was way down from the 1,129 sold to investors the previous year and credited the repayment plans for the reduction.
And she went further, testifying that nobody had lost a home due to an unpaid water bill from either sale in 2008 or 2009. What Fannon neglected to mention: Because of the lengthy transfer process in the courts, it was too early for those groups of property owners to begin losing their homes. Most tax sale lawsuits have taken longer than two years to resolve through the courts.
Fannon also said that without the tax sale, the city would need to file debt collection lawsuits against each delinquent property owner, which she said "would be very expensive, time consuming and flood the courts."
Two days before Fannon's testimony at the state capital, Valentine stood watching as her belongings piled up on the sidewalk in Baltimore.
A Neighborhood's Decline
More than three years after Valentine's small debt drew her into the tax sale, neither the city nor the investors seem to have won much.
The property is unlikely to be fixed up any time soon. Instead, it adds to a sense of decay that permeates some parts of urban Baltimore. On Valentine's old block in the Sandtown neighborhood, all but a handful of houses, abandoned long ago, are boarded up.
Such decline has summoned other ills. "Drugs moved in and replaced the good with the bad," said Valentine, who is living temporarily with her mother. Many of her possessions are in storage.
De Laurentis and Reiff now hold a "writ of possession" for a property that's in need of substantial repair. Though the home is assessed at $46,000, in such dilapidated condition the investors said they probably would have trouble selling it for more than $16,000.
In addition, investors could be on the hook for a $7,000 water bill of their own. Just how that happened is unclear; there may have been an undetected leak in Valentine's home. Last month, the city finally turned off the water.
If the investors take the final step to secure a deed to the property, they would have to pay the city roughly $6,300, which the city is then supposed to turn over to Valentine. The law entitles original property owners to receive at least some compensation.
De Laurentis and Reiff say they're still willing to work with Valentine to resolve the matter. Reiff said he gave her a key to the new lock so she could have more time to remove her belongings as a good faith gesture.
"We'll definitely work something out with her," Reiff said.
IT GOES AFTER EVERYONE! DO YOU KNOW THAT MORE WOMEN/SENIORS AND CHILDREN SUFFER FROM THIS FRAUD AND ITS LACK OF JUSTICE THAN ANYTHING IN RECENT HISTORY?
THE MARYLAND ATTORNEY GENERAL IGNORING ALL OF THIS -----DOUG GANSLER -----IS NOW RUNNING FOR GOVERNOR. AIDING AND ABETTING CRIME AND STILL RUNNING FOR PUBLIC OFFICE!
Have you noticed the market on housing has been climbing these few years with the FED's QE mortgage bond buying moving interest rates to zero? Did you know that all that buying is a result of bundled foreclosures bought by the investment firms enriched by creating the massive subprime mortgage fraud? Did you know the other group buying are foreign and wealthy? Did you know that these same investment banks/firms have yet to lend to small businesses and individuals so none of the people impoverished by these frauds has been able to buy homes at these lowest interest rates ever?
What has happened during Obama's term besides the massive frauds remaining in the hands of the fraudsters is that a massive movement of investment wealth created from those stolen funds has caused wealth at the top to sky-rocket.
OBAMA SAYS HE IS GOING TO START TO WORK FOR THE MIDDLE-CLASS NOW!
More importantly for middle/working class America is that all of the US housing and real estate has been transferred to those 1% and now we have POTTERSVILLE landlords as rental houses. All this happened with suspended Rule of Law. Those investment firms should not have had the money to do this and the FED should never have been allowed to use crony and corrupt policy to expand this wealth.....AND THAT IS ALL THIS IS!
WE CAN REVERSE THIS BY SIMPLY REINSTATING RULE OF LAW AND CLAIMING ALL THESE HOUSING INVESTMENTS AS RECOVERY OF FRAUD! WE MUST DO THIS OR MOST PEOPLE WILL BE CRUSHED BY RISING RENTALS!
This housing bubble for the rich is of course far more dark than this! We know that the subprime loan fraud targeted the poor and working class and the middle-class was drawn into it with the extended stagnation. But cities all across the country and Baltimore especially are working to force people into foreclosure and handing over property to the city often by illegal means. It is incredible to think a US government would openly commit fraud to get hold of people's property, but that is what is happening in Baltimore. It is all part of this drive to hand control of all real estate to these few people at the top and that is especially so in urban areas like Baltimore. The city is creating wide bundles of real estate taking much of low-income communities and handing them to these investors that then rehab and rent at huge profit and control who lives in an area by rent prices. Keep in mind that the people victimized by these frauds have gotten little or nothing and often are homeless because no justice came!
Dec. 20, 2013, 12:49 p.m. EST
All-cash home sales reach new high Why the Fed tapering may help drive more all-cash buyers
By Quentin Fottrell, MarketWatch
More Americans are buying homes in all-cash deals, according to a new report. But real-estate experts say this increase may not be a good sign for the health of the housing market, which may also be impacted by the Federal Reserve’s decision to pull back on its bond-buying program.
Bloomberg All-cash purchases accounted for 42% of all sales of residential property in November 2013, up from 39% during the previous month, according to data from real-estate data firm RealtyTrac released Friday. “This is still a very cash- and investor-driven market,” says Daren Blomquist, vice president at RealtyTrac.
The cities with the biggest month-over-month jumps in the number of all-cash sales, according to RealtyTrac, included Florida (63%), Georgia and Nevada (both 51%), South Carolina (50%) and Michigan (49%). This helped boost overall sales of U.S. residential properties, which sold at an annualized pace of 5.1 million in November 2013, a 1% increase from the previous month and a rise of 10% from a year ago.
The decision by the Federal Reserve Wednesday to reduce its bond-buying program to $75 billion per month starting in January, from $85 billion per month currently, may also encourage more cash-purchases — at least for those who can afford it, Blomquist says. “They’re going to do everything they can to keep interest rates low, which may be tough to do,” he says. To reduce cash buyers, he says there will need to be low interest rates and a cooling off in home price appreciation. “Otherwise, you’ll see the market skew even further toward cash buyers,” Blomquist says.
When interest rates went up slightly in June, there was a notable increase in cash sales, Daren Blomquist says. “Some markets are more interest-rate sensitive than others based on affordability,” he says. “Just a slight increase makes homes a lot less affordable.” In fact, another report by Goldman Sachs in August was even more strongly in the cash-is-king camp, estimating that cash sales now account for 57% of all residential home sales versus 19% in 2005. Walt Molony, a spokesman for the National Association of Realtors, says that the association’s estimate of the share of the market made up by all-cash buyers is lower than others’, at 31% in July, but that it’s still at an all-time high.
Molony says that investors make up 32% of all-cash buyers (70% of all investors pay cash), up from 31% in October and 30% in November 2012, while retirees who’ve built up equity in their homes or paid off their mortgages account for around 12%. The rest include vacation-home buyers and foreign buyers.
While cash buys help explain the surge in home sales over the past year, some experts say it’s an unsustainable trend — and one that should be greeted with caution. “The rise in cash sales is not a good long-term trend for the housing market,” Blomquist says. Although RealtyTrac doesn’t identify who has cash-in-hand, experts say wealthy Americans and downsizing retirees account for some of these all-cash deals. Investors who are keen to make a profit by buying low and renting those properties — or flipping them — also drive up the number of all-cash deals, he says. None of these three groups — flippers, retirees and the wealthy — are big enough to sustain the market in the long run, he says. If it remains dominant in the long run, cash buying “will have a chilling effect on home sales and prices,” Blomquist says.
If tapering does lead to higher mortgage rates, some home buyers might buy with cash rather than a mortgage, says Jed Kolko, chief economist for real-estate firm Trulia. However, many cash buyers are investors, and now that prices have risen, investor activity is also starting to decline, he says. (House prices in 20 American cities rose more than 13% in the 12 months leading up to September, according to the S&P/Case-Shiller index of property values, the biggest rise since February 2006.) “On balance, the all-cash share of purchases will probably decline next year, as fading investor activity outweighs the impact of higher rates.”
Another challenge for the housing market in 2014: The pool of potential buyers is being limited thanks to a combination of tight lending standards and rising interest rates, experts say. “Cash is king in hot markets where getting the sale done now matters and where investors are driving price recovery,” says Susan M. Wachter, professor of real estate and finance at The Wharton School at the University of Pennsylvania. Cash’s dominance is a sign of the fact that it’s more costly and hard to get financing, she says, “that’s a bad thing.” On the upside, interest rates are still historically low, she says. “Now is a time to lock in if you are a buyer.”
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Now, if you followed this debacle you would know it is no accident that bills from hundreds to thousands went out to city residents and when people complained about the faulty bills they were ignored. This was huge and it was devastating to low-income people who were not able to pay and then fight. They were thrown from their houses for what was the city's faulty billing.
The reason I say it is deliberate is that I became involved with a few of these and found the Water Department openly acting deceitfully in trying to retain the money they knew was overbilling. I also know it had to do with development because the people losing their homes were heavily found in Enterprise development zones.
THE CITY OF BALTIMORE ACTUALLY COMMITTED FRAUD TO GET PEOPLE OUT OF THEIR HOUSES AND THEN GAVE THOSE HOUSES TO DEVELOPERS FOR PENNIES ON THE DOLLAR.
None of this is legal and it can be reversed by simply reinstating Rule of Law!
Moratorium Proposed On Water Bill-Based Property Liens Baltimore City Council President Cites Audit Uncovering Billing System Flaws UPDATED 9:15 AM EST Mar 06, 2012 Baltimore Sun
Young introduced a resolution requiring a moratorium on placing liens against properties based solely on unpaid water and sewer bills.
The audit revealed that more than 38,000 customers were overbilled, totaling $4.3 million, while some customers weren't billed at all.
Young said he wants the moratorium in place for two years or until a "viable and fair" billing system is created.
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Now, the problem with Baltimore City water billing is that most of the public workers have been dismissed and they are using what they call averaging....never knowing what people actually use. THE PROBLEM IS STAFFING YET THEY ARE TELLING US THE SOLUTION IS SMART METERS. Now, those who follow me know the problem with Smart Meters but what can be said simply is that the same corporations defrauding us right and left are behind Smart Meters!
All this has to do with the article above that says the housing market is climbing and cash payments are fueling it. These homes go into foreclosure because they cannot pay thousands of dollars for water and then the rich come in and pay cash for these stressed homes. If you think this is all accident-----THEN WHY ARE THESE CASES NOT FIXED IMMEDIATELY? This is not simply a case of dishonest water department employees-----this is from City Hall!
Unpaid Water Bills Leading to Foreclosed Homes
Nov. 12, 2012 By MARK GREENBLATT, GERRY WAGSCHAL, and LAUREN PEARLE Mark Greenblatt
Actor and musician Richard Burton is facing foreclosure on his Baltimore home, but not because he didn't pay his mortgage on time. In his case, he says it all began with an overdue $1,037.42 water bill.
Burton lost his job playing "Shamrock" McGinty on HBO's "The Wire" when the show went off the air. He couldn't afford the bill and claims it was incorrectly inflated to begin with.
However, the cash-strapped city of Baltimore turned to a controversial way to collect. The city sold his unpaid debt to a private company that also inherited a lien on Burton's home. Then, the company tacked on 18 percent interest and more than $2,000 in legal charges.
"You have no choice but to pay or you lose your home, that can't be right," Burton said.
A Colorado Springs-based company called LienLogic is trying to foreclose on Burton's home if he doesn't pay.
The National Consumer Law Center (NCLC) says thousands of homeowners all over the U.S. are threatened with foreclosure every year because of unpaid utility bills.
"Someone could actually lose their home for the failure to pay a $200 or $300 water bill or sewer bill," said John Rao, an attorney with the NCLC.
The NCLC released a report this year citing a Rhode Island senior citizen who fell behind on a $474 sewer bill. A private company took possession of the home she had lived in for 40 years, only to turn around and sell it for $85,000.
Back in Baltimore, Vicki Valentine lost her home over a partially paid water bill. Her family had the home for 33 years. She took possession after her father passed away. Valentine sank into a serious depression following that death and paid the wrong amount on her bill. When she tried to make payments to catch up, they were not enough, and the city sold her debt off as well.
Eventually, Valentine lost the home and says she ended up on the streets.
"And that's not a fun place to be," she said.
LienLogic, the company that bought Richard Burton's debt, makes $100 million a year from its lien business, which it operates in multiple states.
The company initially declined an interview with ABC News, forwarding us to the National Tax Lien Association for comment. The executive director of that organization agreed to an interview, and then backed out.
So ABC News flew to Colorado and tracked down one of LienLogic's co-founders, Erik Carlson. When approached by an ABC News reporter, Carlson would only say: "Like I said, I declined the interview."
ABC News followed up, but Carlson declined to answer our questions about people his company tries to take homes from following the non-payment of small water or sewer bills.
Not all cities sell unpaid debts to private companies. In Houston if you don't pay your water bill, the city will shut your water off and try to get you help. Officials there would never give someone the potential right to take your home away if you don't pay.
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Edgemere Man Receives $15,000 Water Bill
WBFF News
A Baltimore man is stunned by a $15,000 water bill that he says he does not owe. Otto Hart received a delinquent notice Monday morning at his home in Edgemere saying he owes over $15,000. Hart says his water bills average about $25-$30 a quarter but in June he was mistakenly billed $96. After speaking with the Department of Public Works about the mistake, he got a bill for $0 in September after an adjustment. Now, three months later, a delinquent notice for $15,000. But this time when he contacted Public Works, he was told that the matter would be forwarded to another department to be investigating and someone would contact him in 4-6 weeks. "Well, if you owe money, within 4 to 6 weeks, a lot can happen. I mean, you could basically end up having a lien put on your house or your credit could go right down the tubes and there's nothing you can do about it," Hart said. A spokesman with the Baltimore City Department of Public Works says the billing department is reviewing the matter.
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Below you see residents donating their homes for the cost of a few hundred in taxes and property bills. These homeowners have no chance in selling homes without the city's investment in their communities and the subprime loan fraud settlement should have done that. Rather than rehab and sell cheaply to low-income people having lost their homes....the only choice for the existing homeowners in blighted communities is to hand over these houses for nothing to be handed to rich developers.
IT IS THE SAME PEOPLE WHO CREATED THIS SUBPRIME MORTGAGE FRAUD AND WAS ENRICHED BY IT THAT ARE COMING IN AND BUYING ALL THIS CITY REAL ESTATE AND CITY HALL USES THESE WATER BILL SCHEMES TO GET EVEN MORE!
All of this can be reversed by simply reinstating Rule of Law. All these homes in these blocks of real estate should go to those losing their homes to fraud!
Woman’s Home Confiscated Over Small Water Bill
The Other Foreclosure Menace
By Fred Schulte, Ben Protess and Lagan Sebert
May 21, 2010 "Huffington Post Investigative Fund" -- One raw day in early February, Vicki Valentine stood by helplessly as real estate investors snatched her West Baltimore home over what began with an unpaid city water bill of $362.As snow threatened to fall, she watched a work crew hired by the new owners punch out the lock on her front door. A sheriff's deputy was on the scene while Valentine and her teenage son piled whatever they could into a borrowed car.
Running out of time, Valentine scrambled to pack up clothing and mementos. The home had been her family's for nearly three decades, and her father had paid off the mortgage in 1984. "It's hard to say goodbye to this house," she said. "It's like someone forcing you out of something that belongs to you. I don't get it."
Valentine lost the two-story brick row home after the city sold her debt to investors through a contentious and byzantine legal process called a "tax sale." This little-known type of foreclosure can enrich investors as growing numbers of property owners struggle to pay their bills.
WATCH Vicki Valentine's Eviction Day:
These foreclosed homeowners are not the families making headlines for taking on mortgages they could ill afford. Families ensnared in the tax sale sometimes are unable to overcome relatively small debts owed to local tax collectors.
Rather than collect the overdue money they are owed, many local governments are selling tax liens. Buyers range from behemoths such as JPMorgan Chase & Co, and some regional banks and law firms, to small-fry investors lured by late-night television commercials promising quick riches. Investors generally bid in an auction for the right to collect delinquent taxes and other municipal debts on property owners, sometimes by paying only a few hundred dollars. When owners can't pay, investors can pick up property at bargain prices
It can be a good deal for everyone except the property owner. Selling the debts to investors can help governments efficiently ease budget woes without having the added expenses of debt collection, foreclosing and being a landlord.
Investors, meanwhile, can rake in hefty profits. That's because they can tack on fees and steep interest rates, which can amount to 18 percent annually in Baltimore.
In Valentine's case, legal fees and other charges climbed past $3,600 - nearly 10 times her original bill.
Investors purchased an estimated $30 billion of real estate tax debt held by governments across the country in 2009, double the amount a year earlier, according to the Florida-based National Tax Lien Association. Altogether, 29 states and the District of Columbia can sell tax lien debt to investors.
Lien sales in Baltimore have nearly doubled since the housing bubble of 2006. On Monday, the city sold 12,689 liens - a probable record. Properties ranged from boarded-up shells and vacant lots to row homes in gentrified neighborhoods and some commercial buildings.
Last February, Vicki Valentine was evicted when she couldn't pay $3,603.41 to rescue her Baltimore home. Valentine's wasn't a typical foreclosure -- the mortgage was paid off. But when she failed to pay a $362.28 water bill, the city auctioned her debt off in a tax lien sale. An investor now owns her home. City records show that one in five of these liens on properties is for unpaid taxes or other municipal bills amounting to $1,000 or less. If Baltimore's 2009 tax sale is any indication, hundreds will stem from delinquent water bills; there were 666 such liens last year.
Although the brisk tax lien trade thrives beneath the radar, largely unnoticed, it has occasionally drawn scrutiny from law enforcement authorities.
Some of Maryland's most prominent tax sale investors have been swept up in a criminal investigation into bid rigging at the sales. Federal prosecutors allege that those investors agreed in advance which properties to bid at some auctions, improperly reducing the money earned by municipalities.
So far, Justice Department prosecutors have secured three convictions in the ongoing investigation. At a May 4 sentencing hearing for two of the defendants, a witness for the government was lawyer John Reiff, part-owner of the company that currently owns Valentine's lien. He was not charged in the case.
Investing in liens can be risky, with profit on a particular property anything but certain. Investors generally compensate for such uncertainty by buying in large volumes, sometimes at a clip of thousands of liens each year.
Two of the investors who pleaded guilty in the bid rigging case made at least $10 million from fees and other costs collected from owners of some 6,000 property liens they bought over six years, according to federal prosecutors.
Prosecutors said in court filings they suspect bid-rigging occurs in other areas of the country. A JPMorgan subsidiary called Xspand and at least two other companies received grand jury subpoenas last year as part of a Justice Department anti-trust investigation in New Jersey, according to Bloomberg.
'Unintended Consequences'
Some state lawmakers have questioned the fairness of the tax sale foreclosure process, which often sticks homeowners with thousands of dollars in legal fees and other costs. But cities and counties in Maryland earlier this year fended off an effort to keep water bills out of the tax sale, arguing that without the threat of losing homes many people would fail to pay their bills.
Revenue collectors defend their tax sales as a necessary, if sometimes distasteful, means for feeding the public treasury. In aging cities such as Baltimore, there's also hope that new owners will rehab decaying or abandoned properties, restoring them to the tax rolls.
Investors say they aren't the bad guys - they're providing a service that helps plug holes in municipal budgets. Homeowners should face consequences for failing to pay their bills, they argue, noting that people faced with losing property have many opportunities to redeem it. The mounting fees, they say, reflect the costs involved in navigating complex legal requirements, tracking down property owners and taking them to court to enforce the liens. In Valentine's case, they noted, a judge approved the fees.
"We are essentially the city's bill collector," said lawyer and tax lien investor Reiff.
Critics of tax sales question the morality of government tax collectors acting to enrich private investors at the expense of property owners with low incomes or facing hard times. They ask whether it's the best way to compel people to honor their debts -- especially involving relatively paltry public utility bills.
After all, when water bills go unpaid, some cities and counties simply shut off service. In Baltimore, officials often leave it on. Another alternative would be to have private collection agencies track down debtors.
"This is a case where good intentions have led to severe unintended consequences," said Debra Gardner, of the Public Justice Center in Baltimore, a non-profit advocacy group for minorities and the poor.
Asked about Valentine's story, David Vladeck, director the Federal Trade Commission's Bureau of Consumer Protection in Washington, said it was "just horrifying to me."
While noting that his comments did not reflect agency policy, Vladeck said he believed more recession-wracked homeowners across the country could face a similar plight. "It's beyond tragic that this poor woman lost her home."
Pleas - and More Fees
Valentine was incredulous when the price to keep her property shot past $3,600. Jobless and lacking the savings to pay, she said she could do little to stave off the day of reckoning.
That day arrived on February 3, when a Baltimore City Sheriff's Department deputy served her with a court-issued "writ of possession" stripping her claim to the home.
Valentine, a former mental health counselor and rehab specialist with four children, said she moved back to her childhood home about a decade ago to care for her ailing father, Charles L. Turner. A retired brewery worker, he had Alzheimer's disease.
As his condition worsened, he tended to hide bills from the family. (City records confirm that Turner often fell behind in meeting his obligations during the final years of his life and nearly wound up in the tax sale as early as 2000 over unpaid water bills and property taxes.)
When her father died in 2003, Valentine took over the home and stayed there with her son, Dimitrian, now 17. She said she fell into a serious depression in the wake of her father's deteriorating health and death, and was unable to work or pay her bills on time. She has worked only sporadically since his death. Though she made partial payments on the water and sewer account in 2006, she acknowledges her failure to pay a bill of $462.28 in full. She went down to city hall and paid $100, but never took care of the balance.
When the deadline passed for paying up, the city added 2005-2006 property taxes of $287.92, interest and city tax-sale processing charges. That brought the total she owed to $710.57, according to city records.
The City of Baltimore washed its hands of Valentine's debt in May 2006 when it sold the lien to Sunrise Atlantic LLC, an arm of the BankAtlantic in Fort Lauderdale. The Florida bank has bid on tax liens in a range of states, from Florida to Illinois, though it has largely sold off its Maryland lien portfolio and is not implicated in the bid-rigging case. BankAtlantic did not return phone calls seeking comment.
Unlike mortgage foreclosures initiated by banks, there's no appealing a tax sale debt once it is sold off; a property owner has no option other than to abide by the investors' terms and pay the fees. The lien holders also have little incentive to be flexible about repayment terms.
Maryland law gives property owners six months to redeem a tax lien with only minimal added costs. But if they don't pay by then, lien holders can sue to seize the property and stick the homeowner with a slew of fees, including legal bills incurred in taking the matter to court. Sunrise Atlantic filed such a case on Valentine's home in Baltimore City Circuit Court in December 2006, records show.
More than a year later, the court awarded the property to Sunrise Atlantic.
At that point, Valentine sent a handwritten letter to the court, begging for mercy and more time to repay.
In the letter, dated Feb. 9, 2008, Valentine described being unable to work because of depression and other problems. "For now, this is the roof over my son and my head. I am trying to get the money together to catch up on my delinquent bills." She added: "Please allow more time to pay all bills connected with the foreclosure of said property."
But the longer she waited and the more she protested, the more legal fees and other charges she incurred.
In 2008, Baltimore attorney Anthony De Laurentis, who represented Sunrise Atlantic, submitted itemized charges to the court: $305.91 in interest on the lien; a $1,500 bill for responding to Valentine's requests to cut the fees and other legal work; more than $1,000 in assorted expenses, including $325 for a title search of the property and $79 for photocopies, according to court records.
The price list passed muster with a judge, who on Sept. 19, 2008 ordered that Valentine pay $3,603.41 - or forfeit her property.
She asked for another hearing, which delayed the process for more than a year.
While the case dragged on, the Florida bank started divesting its tax lien certificates from Maryland, eventually transferring the lien on Valentine's home to a firm called Montego Bay Properties. Part of the firm is owned by a trust set up to benefit members of the family of lawyer De Laurentis. Reiff, one of De Laurentis' law partners, also owns part of the firm.
In an interview in their Baltimore office, De Laurentis and Reiff said 90 percent or more of property owners eventually pay whatever is necessary to keep their homes.
They said most of the properties they take over are vacant and thus nobody is displaced. They also said they had repeatedly tried to settle the matter with Valentine and showed Investigative Fund reporters a thick file of court papers and other records as well as notes of more than a dozen contacts with her to make arrangements to clear the debt.
"We bent over backwards for her," Reiff said, adding that his staff had tried for more than two years to "work something out" to no avail.
Feds Say Bids Rigged
Though Valentine had no way of knowing it, some investors rigged the 2006 Baltimore tax sale auction that led to her eviction, federal prosecutors alleged in court.
The roots of that conspiracy run deep, prosecutors said. For years, a handful of Baltimore real estate lawyers and their investment partners quietly dominated Maryland tax sale auctions, with few questions asked about their bidding tactics or collection policies.
That changed after The Baltimore Sun used city records and court filings to report in March 2007 that hundreds of mainly low-income city residents had been kicked out of their homes over small unpaid bills, ranging from water and sewer charges to minor environmental citations. Some people were driven from family property because they couldn't afford to pay thousands of dollars demanded by lien holders.
The Baltimore newspaper also documented for the first time that while dozens of parties bid in Baltimore tax auctions in 2006 and 2007, just three investment groups had won about two-thirds of the liens.
Prosecutors went on to charge three men with conspiring to rig bids at 21 auctions in Baltimore and four other jurisdictions, including Montgomery and Prince George's counties in the suburbs of Washington D.C. between 2002 and 2007. All three have since pleaded guilty. No other charges have been filed.
Another investment group involved in the conspiracy was DRT Fund, according to court filings by federal prosecutors. DRT is owned in part by De Laurentis and Reiff. DRT participated in a dozen of the 21 fixed auctions, though not the Baltimore City auction in 2006 in which Valentine's lien was sold, according to court filings.
The Justice Department filed no charges against DRT, which came forward in the fall of 2007 and "fully and truthfully reported their own wrongdoing and that of their co-conspirators and terminated their part in the conspiracy," prosecutors wrote in court papers filed last month.
DRT went on to sign an amnesty agreement with the Justice Department that commits it to "pay restitution to any person or entity injured as a result of the bid-rigging activity being reported in which it was a participant," court records state.
Neither De Laurentis nor Reiff would discuss DRT's settlement with the Justice Department.
Water Bill Woes
Some lawmakers have tried for years, with modest success, to rein in the tax-sale fees that can steamroll low-income homeowners. Maryland legislators passed a bill in 2008 that raised the minimum lien sold from $100 to $250. But a bill to prohibit cities and counties from selling delinquent water bills to investors failed in the state Senate earlier this year by a single vote.
Legislators also rejected a bill that would have prevented the sale of any lien of less than $750, as happens in some other locales outside of the state.
Both bills failed, lawmakers said, largely due to fierce opposition from tax collectors and officials in Baltimore, which conducts the largest tax sale in the state.
Andrea Mansfield, of the Maryland Association of Counties, testified that the tax sale process provides "a much-needed device to ensure that property owners remit payment for their fair share of taxes and charges connected to public services."
Eliminating water bills from the tax sales would result in more "deficient accounts," and lead to "increased rates on citizens who properly pay," she wrote.
Sen. James Brochin, a Democrat from Baltimore County who co-sponsored the legislation that would have banned the sale of delinquent water bills to investors, vehemently disagrees. "It's just disgusting. It's highway robbery. It's dead wrong. It's immoral," he said.
While city officials publicly defend the practice, he said, in reality "they're humiliated and embarrassed by it. Deep down they know how immoral it is."
Baltimore's mayor, Stephanie Rawlings-Blake, declined requests for an interview on the topic with the Investigative Fund.
City officials were more talkative earlier this year when they sought to block lawmakers from banning the sale of water bill liens. Mary Pat Fannon, a lobbyist for the mayor's office, said in prepared testimony for a February 5 hearing that the city had begun offering repayment plans for water bills to help homeowners avoid tax sale.
She said that the 666 water bill liens sold by Baltimore City in 2009 was way down from the 1,129 sold to investors the previous year and credited the repayment plans for the reduction.
And she went further, testifying that nobody had lost a home due to an unpaid water bill from either sale in 2008 or 2009. What Fannon neglected to mention: Because of the lengthy transfer process in the courts, it was too early for those groups of property owners to begin losing their homes. Most tax sale lawsuits have taken longer than two years to resolve through the courts.
Fannon also said that without the tax sale, the city would need to file debt collection lawsuits against each delinquent property owner, which she said "would be very expensive, time consuming and flood the courts."
Two days before Fannon's testimony at the state capital, Valentine stood watching as her belongings piled up on the sidewalk in Baltimore.
A Neighborhood's Decline
More than three years after Valentine's small debt drew her into the tax sale, neither the city nor the investors seem to have won much.
The property is unlikely to be fixed up any time soon. Instead, it adds to a sense of decay that permeates some parts of urban Baltimore. On Valentine's old block in the Sandtown neighborhood, all but a handful of houses, abandoned long ago, are boarded up.
Such decline has summoned other ills. "Drugs moved in and replaced the good with the bad," said Valentine, who is living temporarily with her mother. Many of her possessions are in storage.
De Laurentis and Reiff now hold a "writ of possession" for a property that's in need of substantial repair. Though the home is assessed at $46,000, in such dilapidated condition the investors said they probably would have trouble selling it for more than $16,000.
In addition, investors could be on the hook for a $7,000 water bill of their own. Just how that happened is unclear; there may have been an undetected leak in Valentine's home. Last month, the city finally turned off the water.
If the investors take the final step to secure a deed to the property, they would have to pay the city roughly $6,300, which the city is then supposed to turn over to Valentine. The law entitles original property owners to receive at least some compensation.
De Laurentis and Reiff say they're still willing to work with Valentine to resolve the matter. Reiff said he gave her a key to the new lock so she could have more time to remove her belongings as a good faith gesture.
"We'll definitely work something out with her," Reiff said.
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