A Call for Action on Foreclosure Relief

Maryland officials delivered an alarming forecast of continuing erosion in the state's housing market as lawmakers started work yesterday on a key portion of Gov. Martin O'Malley's legislative agenda aimed at slowing the rate of home foreclosures.

About 23,000 homes entered foreclosure in Maryland last year, and the number of foreclosure actions increased by 38 percent from the third to fourth quarter, Housing Secretary Raymond A. Skinner said at a hearing yesterday of the Senate Judiciary Proceedings Committee.

Skinner said Prince George's County continues to be the hardest-hit jurisdiction in the state, with 28 percent of all foreclosures occurring in the majority-black county.

The Senate committee heard testimony on three bills proposed by O'Malley (D) to change the rules governing the mortgage lending industry and help people at risk of losing their homes.

The bills would provide consumer protections and impose disclosure requirements on foreclosure consultants. The legislation also would create a mortgage fraud statute, including penalties for mortgage fraud.

"All too frequently, when we try to deal with the [homeowner], the train wreck has already occurred and we're just picking up the pieces," Labor Secretary Thomas E. Perez said.

More than a dozen interest groups submitted testimony on the bills and almost all supported them. The Maryland Association of Realtors opposed a measure that would prohibit foreclosure rescue transactions.

Last summer, O'Malley organized a task force, chaired by Perez and Skinner, to study laws and regulations governing foreclosures. Perez said the governor's legislative package addresses the concerns raised by the task force.

"They are appropriately aggressive," Perez said of the bills. "They are surgical. We did not approach this with a meat ax. We approached this with a scalpel."

-- Philip Rucker