A Baltimore homeowner who fell behind on her mortgage payments after her property taxes unexpectedly spiked protested in an attention-grabbing way this week: She went on a hunger strike.
Lauren Rymer started just after 7 a.m. Monday and spent an empty-stomach day camped out in Annapolis, trying to get an audience with Gov. Martin O'Malley and talking to passersby who wanted to share their stories of economic woe.
By the time she ate something at 5 p.m. Tuesday, she'd had a foreclosure alternative offered to her by the state housing department, talked to someone from O'Malley's office about the tax problem and given interviews to a bevvy of media from WBAL to the Huffington Post to MSNBC about her hope that elected officials will do more to help Americans avoid foreclosure.
"Awareness has been raised on this issue, so I feel like the strike was worth it," she wrote on her Hungry4Home Twitter feed Tuesday afternoon.
Rymer, 32, who works for a nonprofit in Baltimore, bought her two-bedroom home in Upper Fells Point four years ago. She said her monthly payment started off at $1,500, including taxes and insurance, which she could afford. But it jumped to $2,100 this year after her property taxes skyrocketed, she said, and that was beyond her ability to pay.
The state Department of Assessments and Taxation, which investigated at the O'Malley administration's request, says it's the result of a little-known exception to the tax break that caps homeowners' property-tax increases at 4 percent a year in the city.
Homeowners don't get the Homestead tax credit on new improvements worth more than $50,000. State law dictates that they'll get hit with the full assessment for that work, phased in over three years, before the Homestead credit goes into effect for the renovated portion. (UPDATE: When I asked for more details, state assessors clarified that the threshold was $50,000 when Rymer purchased her home but increased to $100,000 in 2009.)
Rymer's home was newly rehabbed when she bought it. Unfortunately, state assessors say, the city did not send a copy of the permits their way when the work was done. Thus the state didn't up the taxable value until two years later, when her neighborhood was being reassessed.
Her loan is interest-only through 2011, so she was expecting a $218-a-month increase next year. But the more than doubling of her taxes between 2008 and this year came as a shock. She thought she was protected from big jumps by the Homestead credit.
The state says it sent a notice in the fall of 2008 to inform her, but she doesn't remember seeing anything like that, and it wasn't until this summer that she realized what happened to her taxes. She's sure the $234,000 assessment is far above the property's true value now, but an appeal wouldn't help her decrease her taxes until next July.
"Obviously if this was something I could have foreseen, I wouldn't have purchased the home," Rymer said.
Her mortgage servicer told her she didn't qualify for a loan modification. So she called the state, which owns her mortgage and suggested she put her home on the market as a short sale. She did -- for $125,000, far below the $259,000 she'd paid.
"It's not selling," she said.
On Election Day, she got home from voting for Gov. Martin O'Malley to discover a notice on her door that a foreclosure action had been filed and her home could be auctioned off in 45 days.
Perhaps she really didn't have any options, she thought, but she wanted to put a face to the foreclosure statistics. She ate a piece of chicken when she woke up Monday morning and headed to the state capital with a sign declaring, "Hunger Strike Against Foreclosure Day 1."
The state Department of Housing and Community Development, which runs the Maryland Mortgage Program, brought her in for a meeting toward the end of the afternoon. She said officials suggested that she hand over her deed in lieu of foreclosure, often seen as a better option if the noteholder agrees not to go after the former homeowner for the difference between the home's value and the mortgage balance. (The state told her it wouldn't pursue a deficiency judgment but said the mortgage insurer could, probably for less than $10,000.)
The housing department told me it couldn't discuss her situation but said in a statement that it "will always work with homeowners to explore every viable financial option."
Shaun Adamec, a spokesman for O'Malley, said the department is still looking into her case to see if there are alternatives that would let her stay in the home.
"She's pretty far along in the process, which isn't always the best scenario for helping, ... but there are still options," said Adamec, adding that O'Malley has shepherded through "some of the most innovative and sweeping reforms in the nation" to foreclosure laws.
Rymer said that handing over her deed might be her only way to avoid a foreclosure auction, and she's glad she was given an alternative. Still, it makes no sense to her why it's in anyone's financial interest to foreclose on her in order to sell her home to someone who will make far lower payments than her original $1,500 a month. (That's assuming it changes hands for no more than $125,000, the amount she hasn't been able to get any buyers to bite on.)
Other struggling homeowners, she figures, might have more options than she does. Part of her goal with the hunger strike was to exhort politicians to do more to oversee loan modification efforts, making sure people who should qualify actually get one.
"I don't have a lot of options, and I accept that," she said. "But there are a lot of people who could have options and banks are moving straight to foreclosure."
Tuesday night, she added that she hopes the coverage she got will give other homeowners incentive to speak up, too. "I don't think there's enough activism, people exercising their First Amendment rights -- people think they can't effect change," she said.
UPDATE Wednesday night: Rymer talked to her mortgage servicer again today, and here are the details, for those of you trying to make the math work out.
Her original payment was about $1,640 -- she'd incorrectly remembered it being lower when I talked to her more than 24 hours into her hunger strike. That figure rose to $1,750 in 2008, fell (oddly) to $1,720 in 2009 and then jumped to $2,157 (a bit more than she'd remembered) this March.
As you might recall, her property taxes started rising significantly in 2009, not 2010. Because her mortgage servicer didn't adjust her payments until this year, she had an escrow shortage of nearly $3,100, she said she was told -- further increasing her total.