Baltimore is facing a rash of foreclosures tied to a suspected real estate fraud ring, leaving lenders and tenants of the foreclosed properties in the lurch.
A detailed investigation by the Baltimore Banner laid bare the astonishing details of the scheme, in which a group of New York-based investors allegedly purchased hundreds of Baltimore homes at wildly inflated prices using “hard money” loans, before defaulting on many of those loans.
The Banner identified a company called EGBE Ventures and a web of related entities, all tied to low-profile real estate investors Eluzer Gold and Benjamin Eidlisz, as the group at the center of the foreclosure crisis.
The investor group, based in an Orthodox Jewish community in Spring Valley, NY, purchased more than 700 homes in Baltimore for use as long-term rentals, primarily in majority-Black neighborhoods, according to the report.
The purchases were reportedly financed with some $100 million in debt service coverage ratio (DSCR) loans from dozens of private lenders. A DSCR loan is a form of hard money lending that uses projected rental income as the primary basis for approval.
Now, more than half of the properties owned by the New York group are in foreclosure, raising concerns about property values in the affected neighborhoods, credit availability for legitimate investors in Baltimore, and the fate of renters affected by the foreclosures.
Total foreclosures in the Baltimore area spiked 26% in the third quarter compared with the prior period, and were up 11% from a year earlier, according to real estate analytics firm ATTOM.
I can remember thinking about living in Baltimore about 45 years ago. I’m so glad I came to my senses.