When is a victim not sympathetic?

Possibly when he or she lives for more than a year in a half-million dollar home while paying next to nothing.

In “Rescue is quirk of timing” in Wednesday’s edition of The (Baltimore) Sun, the lead anecdote is Veronica Peterson, a 45-year-old single mother of three who says she can’t keep up with the mortgage payments on a $545,000 house in Columbia. She says she expects an eviction notice any day. The story presents her as a victim of the foreclosure crisis.

However, that’s apparently not the full story. I’ll let the City Paper explain:

…in the comments section below the article, hundreds of readers pointed out what the Sun’s reporters and editors could not, apparently: that Peterson had no business in that house, and that she’s lived there for more than a year rent- and mortgage-free. “Where do you think we can get in on this deal?” one commenter, calling himself Henry Bowman, asked another.

The City Paper goes on to dissect the loan numbers:

The online court and land records show that Peterson closed on the house on Nov. 3, 2006, with two loans from Washington Mutual. The main mortgage, for $436,000, had a starting interest rate of 8.5 percent, adjusting in December of this year to the London Interbank Offered Rate plus 4.99 percent. The second loan, often called a “piggyback,” totaled $109,000 with an interest rate of 11.5 percent, according to The Sun.

Those two payments together would have totaled $3,386.17 per month. That’s before property taxes, upkeep, utilities, etc. Peterson would have to earn at least $50,000 per year just to make her house payments.

But it appears that Peterson made few–if any–payments. The foreclosure was filed July 31, 2007. The balance on the main note then was $435,735.86, plus unpaid interest accrued from Jan. 1, 2007, plus $1,005.72 in late charges. This suggests that Peterson made, at most, one payment on her house: the December, 2006 payment. Given the grace periods typical in home-mortgage business, it is at least as likely that her first payment was not due until January 2007, which would mean she has made zero payments.

Had she made all of her payments, Peterson would have spent about $64,335 so far. Had she rented a similar place, she would have been charged around $2,500 per month–a total of $47,500–since January 2007. Instead, she apparently paid nothing.

Not much of a “victim,” I’d say. I’m also shocked that someone would take out a mortgage for the full price of a home. Am I missing the down payment in this transaction?

JOE BACCHUS, Web Specialist

Foreclosure brochures flying out the door

On June 30, a truck pulled up to the Maryland State Bar Association headquarters and delivered boxes of its newly updated public service brochure, “Foreclosure Proceedings in Maryland.” On July 1, the MSBA started handing them out. By July 15 — just two weeks later — it had gone through more than 1,000 of the 20,000 it had printed up.

And that doesn’t even include hits on the Web version, said MSBA spokeswoman Janet S. Eveleth, who called the response “unprecedented.”

The total includes about 800 brochures given out on request from the MSBA’s office and more than 200 passed out to lawyers attending last week’s MICPEL foreclosure course in Baltimore, Eveleth said.

MICPEL will repeat the “Nuts and Bolts” class this month and next in Rockville and Salisbury, with video replays scheduled for September and November. Scholarships are available for lawyers who volunteer with the Foreclosure Prevention Pro Bono Project.

The printed brochure doesn’t mention the pro bono project — “We didn’t want to do anything that might limit its shelf life,” Eveleth said — but the online version includes the state’s HOPE hotline, 877-462-7555.

BARBARA GRZINCIC, Managing Editor/Law

Bell’s call to action on foreclosures

Noting that “foreclosure impacts everyone,” Court of Appeals Chief Judge Robert M. Bell sent letters to Maryland lawyers yesterday, calling on them to help citizens facing foreclosure.

As we wrote in June (subscriber-only link), the Foreclosure Prevention Pro Bono Project aims to train lawyers to help homeowners assert their rights under new foreclosure legislation that took effect on April 4.

According to the letter, Maryland is one of the 10 states hardest hit by the foreclosure crisis, with 11,000 foreclosures anticipated for 2008.

Lawyers can help either by directly representing homeowners through referral services, providing brief advice at public workshops or serving as of counsel to non-profit housing counseling agencies. Free MICPEL training is offered in collaboration with the Pro Bono Resource Center of Maryland for those willing to accept one pro bono foreclosure case or do 15 hours of pro bono legal services to the project.

Bell calls the program “one of the most important pro bono initiatives of our time.”

What do you think about the program, and the chief judge’s unprecedented endorsement of a single pro bono initiative?

CHRISTINA DORAN, Assistant Legal Editor