Bywater foreclosure threat is withdrawn

In an abrupt reversal, federal housing officials canceled a scheduled meeting this week with residents of Bywater Mutual Homes Inc. and announced they did not intend to continue with foreclosure proceedings against the publicly assisted Annapolis townhouse complex.

Bruce C. Bereano, a lobbyist representing the Bywater residents, said objections from Maryland's two U.S. senators and other elected officials helped avert foreclosure on the 1972 property.


"They [HUD] came under pressure with a quick outpouring of government support," Bereano said. "They tripped up on their own heavy-handedness."

The controversy began when the U.S. Department of Housing and Urban Development advised the board of Bywater Mutual Homes Inc. last month that it was moving to withdraw federal mortgage insurance because the 232-unit complex, known as Bywater Townhouses II, was in serious disrepair and had failed two consecutive annual inspections.


The move left many residents fearful they would be displaced. Representatives of the board also expressed concern about the impact on a sister property, the 76-unit Bywater Townhouses I, which had passed inspection. The federal government subsidizes rents at the complexes, which are owned by a nonprofit corporation controlled by residents.

In a letter dated Monday to Housing Secretary Alphonso R. Jackson, Sens. Paul S. Sarbanes and Barbara A. Mikulski urged HUD to reconsider. They cited the "dream of affordable housing" for low-income families.

Two days later, Mary Ann Henderson, a HUD official in the Baltimore office, wrote the head of the residents board of directors to cancel a meeting scheduled for last night on the pending foreclosure. She said a new inspection would be scheduled and that officials were "not taking any further foreclosure related actions against Bywater Townhouses II at this time."

Deneice Fisher, a 20-year resident who heads the board, said yesterday that she was "elated."

Fisher and Bereano denied the property is in derelict or substandard condition, and said needed repairs would be made by the management company, the Whetstone Co. in Gaithersburg.

HUD will carry out an inspection of the 232-unit townhouse cooperative, Henderson said. The inspection will clear up disparities in the scores given the two complexes, she said.

Bereano said the Annapolis residents may have benefited from publicity surrounding last week's ruling by a federal judge in Baltimore that HUD had adhered to discriminatory patterns in the placement of public housing.

As for his clients, Bereano said: "For the peace of mind of residents, we need to know what HUD's intentions are."