Article Courtesy of The Miami Herald

By Fred Grimm

Published September 25, 2008 

Myrna Mosnowitz was not among the fools and scoundrels who created the mortgage mess.

She wasn't one of the Wall Street bankers who dreamed up nefarious loan schemes. She wasn't some broker peddling subprime mortgages to any unqualified buyer who could make his mark.

She wasn't a speculator who gambled on a quick re-sale and lost. She didn't work for an investment house that sold huge portfolios of these toxic debts in the global marketplace, turning a domestic disaster into a worldwide financial catastrophe.

Myrna Mosnowitz was not a naive knucklehead who bought a home she couldn't afford with a loan she couldn't repay.

COLLATERAL DAMAGE

Myrna, innocent bystander, had nothing to do with the lousy deals that put her in such financial peril. Think of her as collateral damage.

''I don't sleep at night,'' she said Wednesday, describing how the foreclosure mess has enveloped her life in a shroud of worries.

The 69-year-old retired school teacher foresees a personal calamity despite careful management of her finances.

Eighteen months ago, the pensioner paid off the mortgage on the Kendall condo she purchased 29 years ago. She faithfully pays her taxes and condo fees. She even purchased a $10,000 insurance policy in case her condo association levies a special assessment.

Yet, responsible owners are also trapped in the subprime quicksand. Twenty-two of the 202 units in her condominium building are in various stages of foreclosure. Absconders stopped paying the $209 regular maintenance fees.

So far this year, delinquent owners have shorted the condo association more than $100,000.

Worse, the condo board will need a special assessment to pay for the roof damaged by hurricanes in 2005. But each new foreclosure -- more are coming -- makes that money seem more unobtainable.

Myrna worries -- with good reason -- that without repairs, the county will declare the building uninhabitable. (She didn't want to name the building and ruin what might remain of the condominium's market value.)

''I thought I had done everything right.'' Yet she worries she may lose her home. Owners with less equity, rather than deal with the condo's growing financial plight, are likely to just walk away, causing the foreclosure problems to escalate for owners like Myrna, whose big mistake may have been paying off their mortgages.

CHANGING THE LAW

''It's a death spiral,'' said Miami Beach City Commissioner Jerry Libbin. He spoke of Mosnowitz as another of the thousands of unwitting condo owners imperiled by the epidemic of foreclosures. And a state law that allows banks, which foreclose on delinquent properties, to skimp on condo fees.

Libbin has organized a community meeting Oct. 15 (6:30 p.m.) at the Loews Miami Beach Hotel to drum up demand for changing the law allowing banks to dodge most of the fees so crucial to condominium maintenance.

The commissioner said Wednesday that he had learned just that day about a 28-unit Beach building with seven condos in various stages of foreclosure, leaving the board in such dire financial shape that it's unable to pay a plumber to fix a burst pipe.

Myrna, he said, represents the innocent victims of this giant meltdown. Libbin said, ``People who do everything right are getting sucked down anyway.''