On the steps of a downtown courthouse yesterday, under gray skies and a morning chill that had yet to burn off, Yvonne Palmer's house was sold.
She wasn't even there as an auctioneer, in the rapid-fire delivery of his trade, rattled off the legal description of the property and the terms of the sale. About a dozen potential bidders listened, affecting the kind of desultory, I-could-take-it-or-leave-it air that you see at any auction, whether at Sotheby's or outside a courthouse.
It's an odd little sidewalk drama - an alfresco auction is a strange thing to pass as you enter the courthouse for jury duty or make your way to the corner hot dog vendor for lunch - but one that is on the rise nationwide. Foreclosures are soaring, as the once hot housing market cools off and more homeowners, particularly those who took out some of the newer high-risk loans or bought beyond their means, get behind on monthly payments and end up losing their houses on the steps of a courthouse.
While foreclosures are up nationwide - 42 percent by one estimate - here in Baltimore, homeowners also increasingly are concerned about losing their houses through less typical means: As recent stories in The Sun have shown, residents have lost their homes for getting behind on their ground rents or even water bills.
While The Sun's stories prompted state legislators to pass laws this session to overhaul the antiquated ground rent system, a city proposal to similarly help prevent owners from losing their homes over delinquent water bills has run into snags. In next month's tax sale - in which the city sells to investors the right to collect taxes and other debts from property owners, rather than continue trying to collect them itself - about 2,700 of the properties are included because the owners haven't paid their water and sewer bills. (The investors can charge interest and fees on the debts and, if they remain unpaid, sue to seize the properties.)
Arlene Fisher, who testified before a City Council committee considering the proposal Wednesday night, said she almost lost her Harlem Park-area home after falling about $1,000 behind on her water bill. She said she only found out her home was in the tax sale when she received a letter from an investor threatening to seize her property.
"If you're going to do something as important as take someone's house," she told the committee, "there should be more than sending a letter. If you're going to sell someone's home ... for a water bill, I think you should be called to a hearing."
After paying the investor about $6,000, Fisher said, she was able to keep her home.
But the proposal to remove water-bill liens from the tax sale remains up in the air - the city's law and finance departments have recommended against its passage, and City Council's Taxation and Finance Committee did not vote on the measure Wednesday night.
As the city continues to look at the water-bill issue, the more common way of losing a house - through foreclosure for falling behind on mortgage payments - are on the rise, here and elsewhere. The number of foreclosure filings in the U.S. went up 42 percent last year compared with 2005, according to RealtyTrac, a company that compiles data on mortgage defaults and auctions. It is predicting a 33 percent rise this year, and attributes the recent jumps to riskier mortgages, such as subprime and adjustable-rate loans - which start low but then bump up quickly - that have become popular lately.
"There seems to be a lot of higher priced inventory now, houses where people stretched and bought more than they could afford," said Fred Lewis, who estimates that his company, Dominion Properties, buys and then renovates about 100 properties a year. "Maybe it's linked to those mortgages with zero down payment."
It's a risky business on their end of it as well - they buy foreclosure properties at an auction on an as-is basis, without getting a look inside. Plus, it's a cash deal, and, if anyone's living in the property, you're responsible for kicking them out.
"That's why it's mostly all investors," said Stephen N. Goldberg, whose law firm, Cohn, Goldberg & Deutsch, specializes in foreclosures and had two sales in front of the Clarence M. Mitchell Jr. Courthouse yesterday. "Your typical family looking to buy a house doesn't want to take that kind of risk."
Sometimes, the homeowners themselves turn up at the sale, having cobbled together enough cash at the last minute to redeem their property.
But today, there's no redemption. Bidding is pretty light - one house gets no bids at all, and the other one, Palmer's house, drew just two and sold for $72,000.
"I don't know how to feel about it," she said with a sigh when I called her after the auction. She said she and her husband bought the home in 1999 and separated a couple of years ago, which led to her getting behind on the mortgage and the house going to foreclosure.
Activists are agitating for assistance for homeowners who have lost their houses - Senate Democrats this week said they'll propose a new federal aid program - and say that it can take years for those who have gone through foreclosure to re-enter the market again, if ever.
Palmer, who works part time as a licensed practical nurse, can attest to that. As she tries to find somewhere else to live with her two children, she says she's not sure she ever wants to buy another house again.
"It's too much responsibility," she said, with another sigh.