Bank Foreclosure Property, Recession Ravage a City

Recession has severely damage the economy of the United States. It created a flood of bank foreclosure property and massive layoffs. No place can better demonstrate the impact of recession and bank foreclosure property crisis than the city of Baltimore in Maryland.

Some indications that the city is roiling in foreclosure include the bankruptcy of owners of Harborplace, increasing foreclosure and unemployment rates, unsold cargo at ports and uncollected garbage.

City finance director Edward J. Gallagher said that previous fiscal years had been good to Baltimore. He explained that in terms of wealth, Baltimore is a poor city. But because of its strong and healthy economy and housing market growth, the city had a good level of resources. Now, Gallagher added, the impact of recession is felt everywhere.

The charitable organization, Daily Bread has been providing meals to an increasing number of people lately. Volunteer coordinator Aaron Kennedy noted that suddenly, there is an acute need for hot meals for different types of people.

Meanwhile, Gallagher said that the city is about to reduce its jobs and services as work on the fiscal 2010 budget is nearing completion. He explained that he do not want to use the city’s emergency fund which was set up in 2005 and 2006 when the city was earning huge revenues.

He added that the fund will be used only as a last resort, meaning if the city could not cover its spending by the end of the year.

According to the census bureau data for 2007, about 15 percent of families in Baltimore are living below the poverty line and over one third of families were earning not more than $25,000 annually.

The city’s unemployment rate jumped to 8.3 percent in December last year and reached 10.1 percent in March. The Department of Finance is expecting joblessness to continue to rise in the city in the coming months.

On the other hand, home sales dropped drastically by 60 percent since five years ago. The real estate market crisis is threatening the city’s finances as indicated by the falling Transfer and Recordation Tax revenues from $116 in 2006 to $48 million this year.

Statewide, Maryland’s bank foreclosure property filings in the first three months of 2009 declined by 7 percent from the last quarter of 2008 and 18 percent lower from the reported level in the first quarter the previous year.

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