News Summary
Baltimore is grappling with a severe foreclosure crisis, largely driven by New York investors failing to meet mortgage obligations. Over 700 properties have received foreclosure notices, affecting residents like Diana Scott who faces losing her home. This trend raises concerns about the impact on the local housing market as many homes owned by these investors are now unrenovated and struggling to attract buyers. The alarming rise in foreclosures is echoing past financial crises, jeopardizing the housing stability for families in both East and West Baltimore.
Baltimore is experiencing a significant foreclosure crisis, predominantly affecting homes owned by New York investors who are failing to meet mortgage obligations. Over 700 properties across the city, including those on Diana Scott’s street, have received foreclosure notices, deepening the housing instability in the area. Scott’s rowhouse, where she has resided for five years with her family, has seen its value triple during their tenancy, yet she now faces the uncertainty of losing her home due to a foreclosure notice.
The alarming trend extends beyond Scott. On her street alone, nearly a dozen homes are affected, while up to 704 properties throughout Baltimore are in similar situations. These homes, many of which are part of a portfolio owned by New York investors, are hitting auction blocks at inflated prices, yet they attract few buyers, raising concerns about the real estate market’s health in the region.
The investors behind this portfolio, prominently linked to Benjamin Eidlisz, acquired homes using a popular mortgage loan product. This includes a substantial amount of funding from private equity firms. However, many of the mortgages linked to these homes are now in default, creating a ripple effect that is impacting lenders and investors alike. In a significant move, five financiers associated with Wall Street have blacklisted the New York buyers from obtaining new loans in Baltimore, indicative of the severity of the issue.
According to recent investigations, at least 50% of the properties in the New York investors’ portfolio are facing foreclosure or are nearing that point. Since Eidlisz and his partner, Benjamin “Bruce” Sherr, began purchasing homes in Baltimore through B&H Ventures in 2017, they have acquired roughly 100 homes. However, with less than a third of these properties receiving construction permits since 2019 and less than a quarter having paid water bills in 2023, the occupancy and maintenance of these homes are in serious question.
Eidlisz and Sherr’s investments targeted regions within what is referred to as the “Black Butterfly,” areas with majority-Black populations historically denied access to financial resources. Their initial plans to rent out these properties for profit shifted dramatically by 2020, as they encountered significant financial difficulties and faced lawsuits. Sherr’s personal bankruptcy filing in 2022 effectively halted legal actions against Eidlisz, but the situation did not improve, leading to a new partnership between Eidlisz and Eluzer Gold, who subsequently acquired more homes under EGBE Ventures.
Concerns over inflated property valuations have arisen, especially given the risky lending practices that have become prevalent in the area. The use of Debt Service Coverage Ratio (DSCR) loans, which require less documentation, has led to a surge in borrowing among real estate landlords in Baltimore. The percentage of these loans has escalated from 10% of loan dollars in 2019 to 40% by 2022, totaling over $150 million. However, rising foreclosure rates tied to DSCR-financed properties pose a threat to the entire DSCR market and have raised alarm bells among local lenders.
The ongoing crisis reflects troubling echoes of the Great Recession, suggesting potential repercussions for property values and the overall housing supply in Baltimore. As families struggle, including Scott who is a mother of three facing potential eviction without clear routes to affordable alternatives, the trend of increasing foreclosures continues to lead to significant housing instability in both East and West Baltimore.
With over 70% of homes linked to the New York portfolio remaining unrenovated since 2019, many residents are left grappling with uncertainty. As the situation develops, community experts emphasize the need for proactive measures to mitigate impacts on the already vulnerable housing market.
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Additional Resources
- The Banner: Baltimore Housing Foreclosure
- Baltimore Sun: Maryland Faces Deepening Affordable Housing Crisis
- Vox: Affordable Housing Supply Crisis
- Bloomberg: Baltimore Loan Concerns
- CBS News: Grant Awards for Maryland’s Vacant Properties
- Wikipedia: Housing in the United States
Author: STAFF HERE BALTIMORE WRITER
BALTIMORE STAFF WRITER The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.
