Mortgage Woes in Baltimore

In Baltimore, in the middle of the mortgage mess, a lot of despair has landed on Roy Miller's desk.

Miller, a housing counselor for a nonprofit group, is saving some of his neighbors' homes. Foreclosure filings jumped 25 percent in Baltimore last year, but in Miller's neighborhood, the number dropped, and he gets most of the credit in this credit crisis. Miller used to sell mortgages, so he knows the game. But many of his clients didn't.

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"They can say this is a fixed rate but they don't tell you it's only fixed for two years and your payment is going to jump up $300, $400 in two years. You know, you do not understand that paperwork when they are sitting in front of you when you've got four hours of documents to sign," he said. "That's predatory lending."

Baltimore, like other cities, was flooded with cheap loans and became a subprime town. But city officials charge that predatory lending here was aimed at one group and was no coincidence.

"Foreclosures in the African-American community are four times higher than in non-African-American communities," said Baltimore's Mayor Sheila Dixon.

Dixon has taken a bold step, suing the biggest lender in Baltimore: Wells Fargo. She says its practices were predatory and led to boarded up homes and entire blocks that are nearly deserted. Dixon maintains that Wells Fargo offered better deals to white people who wanted to own a home. She says she compared "apples to apples," evaluating black and white applicants with the same credit records, same type of housing requests and the same income levels, and says Wells Fargo took advantage of a vulnerable group of people.

Homes Lost Forever

Emily Wade took out an adjustable rate loan to pay bills and make home repairs, but when that loan ballooned she found it difficult to make payments. Her home went into foreclosure last year.

"It's like an avalanche. It goes like cotton candy," Wade said. "Before you know it, you're in trouble and you're getting a call you're in foreclosure."

While the house sat empty, she was often forced to sleep in her car, until it was repossessed.

"I cried," Wade said. "The home that I grew up in, a legacy that was left to me by my parents, it was lost forever. It was devastating."