Sheriff's sales are usually grim affairs in which speculators, lenders and municipalities bid on the properties of those who've failed to pay their mortgages or taxes. But the April 5 sale, set for the County Courthouse Gold Room, could get interesting, because of a bid by the Association of Community Organizations for Reform Now to stop sheriff's sales of homes.
In February, ACORN asked Sheriff Pete DeFazio for a moratorium. "The first time we went to see the sheriff, he said he stood with us and understood that it was an emergency," says ACORN organizer Maryellen Hayden. The sheriff now insists that the April 5 sale, expected to list about 900 properties, will go on, and ACORN plans to protest.
Sheriff's Solicitor William Stockey says state law requires a sheriff's sale every month, but admits the home auctions are sometimes postponed. In the early 1980s, for instance, then-Sheriff Eugene Coon postponed home foreclosures "as a result of the closure of the steel mills, which was a financial crisis here, and the courts backed him up," Stockey says. "Philadelphia County got a 30-day stay on [the sale of] owner-occupied residences only last month." Stockey hopes to determine whether today's foreclosures and tax delinquencies represent an emergency, and is reviewing Philadelphia's action.
"It's a shocking state of emergency, as far as we're concerned," says Hayden. She cites City Paper reports that mortgage foreclosure filings rose steadily from 1,142 in 1995 to 4,147 last year. Through March 25 of this year, lenders have filed 1,097 foreclosure actions, putting the county on pace for 4,710 filings in 2004. Not every foreclosure filing ends in a sheriff's sale; some borrowers pay the debt or sign the property over to the lender.
"Seven or eight years ago, we would have had maybe 90 sales," says Stockey. (Some of the 900 listed properties likely will not sell, and will be listed again in subsequent months.)
Hayden blames the slow economy, high tax assessments, and subprime and predatory lending. "These subprime lenders are foreclosing in huge numbers, and we think that there are predatory loans in the mix," Hayden says.
Subprime lenders loan to those with low incomes or tarnished credit, and charge high fees and interest rates. Some lenders, brokers and home contractors use "predatory" tactics to rope borrowers into unaffordable loans. (See News Feature, "Raiding Spaces," opposite.) A City Paper review of county records suggests that whereas in 1995 some 10 percent of foreclosures were filed by subprime lenders, those lenders are now responsible for nearly half of foreclosures.
A delay would allow ACORN to comb the foreclosure lists for predatory loans, and secure state aid for eligible borrowers, says Hayden. If the sales march on, she says, there will be no time to reach borrowers. "It's like a house-eating machine."