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Property in market limbo grows weeds, frustration

September 01, 2012|By ARNOLD S. PLATOU | arnoldp@herald-mail.com
  • Property on Reno Monument Road is overgrown and in disrepair according to neighbor Tim Vittetoe.
By Kevin G. Gilbert/Staff Photographer

BOONSBORO, Md. — From his modern home, it pains Henry Stiles to look a few hundred yards down Reno Monument Road and watch the deterioration of the historic farmhouse where he was raised.

The overgrown yard and wild-weed fields around it have alarmed neighbors Tim Vittetoe and Jimmy Hartle for nearly two years.

Sheri Anne Stewart, who bought the old house, barn, outbuildings and their 8.63-acre site a few rural miles south of Boonsboro in 2007, moved out in 2010 after she stopped paying on the mortgage.

Now, nearly two years after Stewart won U.S. Bankruptcy Court protection from paying off the nearly $400,000 in loans she had on the property, Washington County Circuit Court records show that lender Bank of America still hasn’t pursued the foreclosure needed to sell the property.

In the meantime, much of the siding and wiring has been ripped from the house, the barn is rotting, and “every time you go by, somebody has dumped something” on the land, Hartle said. “It’s become the dump for the neighborhood.”

“The bottom line is, here’s a property just setting there,” Vittetoe said. “The bank doesn’t want it. She (Stewart) doesn’t want it. And, no one wants to take any upkeep responsibility on it.

“How many times is this happening in our state, in our county?”

There might not be a precise answer, but the potential in this county alone can begin to be estimated by the nearly 2,000 foreclosure sales finalized here from 2007 through mid-August of this year, according to figures recorded by the Washington County Clerk of the Court’s office.

It isn’t known how many of those “sales” were from public auctions on the county courthouse steps where, frequently during the recession, it’s been the lender buying back the property rather than a sale to an individual.

Another unknown part of the equation is how many properties are like the old farmstead on Reno Monument Road, those on which borrowers have stopped paying but the lender hasn’t pursued foreclosure action.

The impact of the foreclosure crisis on neighborhoods statewide is wide-ranging, according to a Maryland task force formed late last year to study the situation.

“It is clear that a foreclosure affects not only the people who are losing a home, but also the neighborhood and community left to deal with a range of negative consequences from vacant properties, decreasing property values, and uprooted families and social networks,” the task force told Gov. Martin O’Malley in its final report in January.

Even this summer, banks are seeing homeowners in financial crisis, the president of the Maryland Bankers Association said in late August.

“As we continue to see challenges regarding unemployment, we have (association) members who are saying people are coming into their branches and saying, ‘I can no longer afford to keep up with payments. Can we talk about how I can do a graceful exit from my property?’” said association president Kathleen Murphy, who was a member of the governor’s task force.

Murphy and others said there are encouraging signs in Maryland and across the nation that might help ease the crisis.

“One is housing prices are starting to go back up. Inventory is down. So it’s sort of a supply and demand thing,” Murphy said. “So that’s very positive.”

Another good sign is that the so-called 90-day delinquencies have decreased in the state, she said. “In other words, there are fewer borrowers today who are more than 90 days past due than there were in prior quarters.”

Then, too, legislation based on task force recommendations was enacted this year and is to take effect in October, Murphy said.

The new measures are designed to help “stabilize neighborhoods quicker because you know if you have a home that’s been foreclosed on, it tends to bring other properties’ value down. So the quicker we can help,” the better, she said.


Dashed hopes

Now, nearly two years after she moved out of the 20725 Reno Monument house, Sheri Stewart is still devastated by the loss of her hopes for the property.

“This was a dream of mine. I’m never going to get over what happened,” said Stewart, 44.

Her dream was to move Hot Dogs, the dog grooming business she began in Sharpsburg eight years ago, to the rural farmhouse property and expand her business by offering boarding for up to 20 dogs. “I was going to be rich,” she said.

The plan began to fall apart soon after she paid $399,000 for the Reno Monument property in March 2007.

To help finance the deal, Stewart obtained $319,200 in a 30-year mortgage from a Frederick, Md., lender, plus a home equity line of credit from the same lender for up to $59,850, according to Washington County deed records. In addition, Stewart said, the county approved a zoning exception for her to operate the business on the property.

The remaining keys to her attaining her dream included being able to quickly sell her Sharpsburg property, cashing in on the nation’s rapid rise in real estate prices in the early and mid-2000s.

“Everybody was selling theirs and making tons of money,” Stewart recalled. “Everybody was telling me, ‘I sold my house for like twice, three times what they’d paid.”

So when Stewart put her 108 N. Potomac St. house and shop in Sharpsburg up for sale, she asked nearly triple the $99,000 she’d paid.

What she and many others trying to sell properties didn’t yet realize was that by 2007, the real estate market had begun to fall away as people began to understand the riskiness of the subprime loans that had fueled the surging demand for housing since 2004.

“All the houses had been going for crazy amounts of money. Crazy!” Stewart said. “Then, all of a sudden, I bought that (Reno Monument) place and prices went down.

“And, eight months this (Sharpsburg) place was for sale and nobody looked at it. Eight months! So then, we dropped it down to like $230 (thousand) and still, nobody looked at it. And then, we tried to rent it — and went for months with no one. ... At this point, it’s worth like nothing!” she said.

All the while, Stewart said, she was paying the mortgages and the lines of credit she had on both properties. On what by 2008 was barely a $30,000-a-year income, her 2010 bankruptcy petition shows, Stewart said she managed to keep all her loan payments current.

If she did that for at least the first year after buying the Reno Monument property, Stewart said, her lender had said it would loan her additional money to help fix up that property so she could move her dog care business there.


‘All for nothing’

After she met the 12-month goal, she said, the lender told her the special economic program through which it had planned to provide the loan had ended and it couldn’t loan her more money.

In the meantime, she said, she’d spent “almost $20,000” building a sand mound septic system for her dog care business on the Reno property because it wouldn’t perc. She’d also spent $1,200 extending a concrete floor in the property’s former milking parlor, for the dog runs, she said.

As it turned out, those expenditures were “all for nothing,” she said. The county said more improvements — that she now couldn’t afford — were needed before she could have a dog care business there.

“So I was stuck,” Stewart said.

In late 2009, Washington County Circuit Court records show, her lender filed a notice of intent to foreclose on the Reno Monument Road property, claiming Stewart was more than $10,000 behind on her payments.

Court records show that Stewart received a notice telling her the lender planned to sell the property unless she caught up on her payments. The notice also informed her she had options, including selling the property herself and/or filing for bankruptcy protection.

Realizing her dream was hopeless, Stewart said, she stopped paying on the Reno property loans, moved back into the Sharpsburg house and, in August 2010, filed for Chapter 7 bankruptcy protection.

In papers filed with the U.S. Bankruptcy Court, she said her intention was to “surrender” the old farm property to Bank of America, which by then had taken over the loans originated by the Frederick lender.

That December, a judge granted her petition, freeing her from the $373,367 debts remaining on that property. Technically, she also was freed of the mortgage and line of credit on her Sharpsburg property, but it’s now her home and business location, and she said she continues to make those payments.

A week after Stewart had obtained bankruptcy protection, the foreclosure filed by her lender on the Reno Monument property had been dismissed, Circuit Court records show.


The county’s stance

Reno Monument Road neighbors Vittetoe, Stiles and Hartle saw the old farmstead’s appearance begin to slide quickly after Stewart moved out.

Vittetoe, a retired Maryland State Police trooper, and his wife own a house on nine acres uphill from Stewart’s now-vacant property. Hartle works as an electrician and also raises crops and beef cattle on nearly 150 acres on another side of Stewart’s land. Stiles, who works with computers, and his wife own a house on six acres across the road from Vittetoe’s home.

Vittetoe, who lets Hartle raise hay on part of his land, and Hartle became alarmed as the land Stewart had left began sprouting thistles, Johnsongrass and other noxious weeds, whose seeds they feared would spread to their own properties.

“If you get weed seed, it makes a mess out of a hayfield,” Hartle said.

So Vittetoe, knowing the county government has a weed control ordinance, said he began calling the county to get it to take action to have the weeds mowed. The county responded, but the contractor they sent “only mowed one thin swath around the (Stewart’s) house,” Vittetoe said.

According to county spokeswoman Sarah Lankford Sprecher, the mowing was done one time to remove grass and weeds more than 18 inches tall — the height limit the ordinance specifies. That was between Aug. 16 and Sept. 22 in 2011, and for that mowing, the county paid the contractor $240, Sprecher said in an e-mail.

The county doesn’t mow such properties on a regular basis, Sprecher said. Instead, she said, when a citizen files a complaint along with his or her contact information, the county zoning inspector looks at the property and decides whether it’s in violation of the ordinance.

If so, she said, the county notifies the owner, who has 10 days to mow the property. If that’s not done, the county pays a contractor to do the work and bills the landowner at least $250 each time as reimbursement, she said.

But the county only responds to a complaint and, in the case of Stewart’s Reno Monument property, Sprecher said, “only one complaint has been received” and that was last year.

Told by the newspaper about the ongoing situation, county Zoning Coordinator Kathy Kroboth, who oversees the county weed control program, called Vittetoe last week and arranged to have a county employee meet him at the site to review the problems.

“Evidentally, Mr. Vittetoe paid to have it maintained and that shouldn’t be,” Kroboth said of Vittetoe’s efforts to control the weeds on Stewart’s property. “I can’t guarantee we’ll be able to cut all eight acres. We’ll do what we can.”

In addition, Kroboth said, she would contact Maryland’s noxious weed control official to see whether he can help at least by spraying to kill the weeds.

Thus far, Sprecher said, Stewart hasn’t paid the $250 for last year’s mowing. So, as Sprecher said is county policy, the county put a lien on the property, according to a notice of lien filed in county deed records last October.

Asked about that, Stewart said she’s been ignoring the county’s letters for payment because she doesn’t think she owns the property anymore. She said that since her bankruptcy was approved, she thinks the lender owns the property and “the bankruptcy releases me from any obligations to them.”

Stewart’s bankruptcy attorney, who has an office in Frederick, didn’t return repeated calls for comment from The Herald-Mail.

Hagerstown attorney Roger Schlossberg, a trustee at the U.S. Bankruptcy Court in Greenbelt, Md., told the newspaper that in such cases, the debtor owns his or her property until the lender files a foreclosure notice in the county court and sells the property.

It doesn’t make any difference that a debtor has told the bankruptcy court he or she intends to surrender a property if bankruptcy protection is granted, Schlossberg said.

“‘Surrender’ just means ‘I’m giving up my rights,’” he said. “It doesn’t mean you’re signing a deed and giving it to the lender.”


Whose responsibility?

Regardless of who owns the property, someone needs to take responsibility for its condition, the Reno Monument neighbors said.

Despite Sprecher’s saying that the county has only received one complaint about the old farmstead, Vittetoe said he’s repeatedly called and complained to a county employee he thinks is supposed to enforce the county’s weed ordinance.

“I’ve talked to (the man) at least eight times over the past two years,” Vittetoe said.

In addition, Vittetoe said, “I’ve been in touch with the bank (Bank of America) on several occasions, trying to find out if it (the property) is going to be sold.”

Each time, he said, the bank has told him the property isn’t for sale yet.

Asked about that more than a week ago, Bank of America released a statement Thursday saying that though “foreclosure has not been completed on this property,” it had the grass near the home cut last week and was having more of it cut soon.

The bank’s statement said it is willing to demolish the barn, but might not do that until the foreclosure is completed and the deed has been transferred.

Hartle said he and Vittetoe “think the bank ought to do something about getting rid” of the property. “It’s an eyesore. There’s both of us trying to do something with it and nobody will talk about it.”

Since Stewart moved out, Vittetoe said he’s had Hartle twice bush-hog the weeds growing in the old farm’s two-acre field, next to his own. Hartle said he’s taken it on himself to keep another of the old farm’s fields closest to his land clear of weeds by planting crops on it.

“I don’t want anything from the bank for doing the thistles. I just want the bank to put it on the market, make it available for somebody to do something with,” Hartle said. “I don’t know what anybody would do with it. I mean, it’s an eight-acre dump.”

Stiles, 50, has reason to feel hurt by what’s happened to the property.

He grew up in the old farmhouse when his parents, the late Charles and Nancy Stiles, owned and operated a dairy farm on 204 acres, including the tracts where he and Vittetoe live now.

Stiles said his mother had done research showing the house was built in the 1700s. A state assessment report on the property says it was built in 1730, although a report for the Maryland Historical Trust says it was likely built in the 1800s.

Watching the old house deteriorate from the newer nearby home into which he moved 10 years ago has been hard, Stiles said.

“It’s always bad when you see the place where you grew up go to hell in a handbasket,” he said.

Stewart said she has mixed feelings about what’s happened with the property and her debts.

“I think I was stupid and I just didn’t know what I was getting myself in to. In my mind, I was going to be rich. These houses were selling for so much. I really thought it would work.”

Every step she took in trying to make her dream come true, “I did it legally. I mean, I didn’t steal. I did the only thing I could do. I did it legally. I mean, if I’d stayed there and I didn’t move out, that would have been bad. I didn’t have a choice. I did everything I could,” she said.

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Statement by Bank of America

The following statement was released Thursday by Bank of America after The Herald-Mail asked it about the vacant house, barn and outbuildings at 20725 Reno Monument Road that has been deteriorating since its owner stopped paying on the mortgage and moved out.


“Bank of America is committed to maintaining vacant properties to neighborhood standards. We work with service providers to inspect and maintain more than one million properties each month. When we learn that a property is vacant and not being maintained, we take action to remedy the situation, even if the borrower still holds title to the property.

“In this case, foreclosure has not been completed on this property; however, we had a vendor visit the property last week to cut the grass around the home. This is a large property, and an additional grass cut and a perimeter cut is scheduled for later this week.

“We have submitted bids to demolish the barn to the mortgage investor who owns the loan, however we may not be in a position to address that issue until foreclosure is completed and title has transferred.”

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