Sweeping Bills Passed To Help Homeowners
Thursday, April 3, 2008
Maryland lawmakers passed some of the nation's most ambitious legislation to control the housing crisis yesterday by toughening oversight of the mortgage-lending industry and establishing preemptive measures to help people at risk of foreclosure.
Taken together, Maryland's bills are among the most sweeping in the country as legislatures from California to Florida consider proposals to stem the escalating rate of foreclosures.
Components of Gov. Martin O'Malley's legislation package cleared the Democratic-controlled General Assembly yesterday, and other bills advancing in it were widely expected to pass as soon as this morning. O'Malley (D) could sign some of the bills into law this afternoon, and the emergency measures would take effect immediately.
The bills include making the most egregious mortgage schemes subject to criminal prosecution, extending the foreclosure timetable from 15 to 150 days and prohibiting prepayment penalties and transactions in which homeowners are tricked into signing over their houses to third parties.
Lawmakers hailed the legislation as a signature accomplishment for O'Malley, whose administration introduced the package after conducting a broad study of the housing crisis last year.
"There are people who are suffering in silence and have the feeling they are two or three months behind in [payments] and don't know who to turn to," said Sen. Ulysses Currie (D), whose Prince George's County district is among the hardest hit with foreclosures. "The bills will give these people a sense of hope and direction."
O'Malley is expected to announce soon that he will lead a statewide campaign to inform homeowners facing foreclosure about how they can seek help and about new state programs available, said Thomas E. Perez, secretary of labor, licensing and regulation. The governor will appear in ads on TV, on radio, in newspapers and on the sides of buses, Perez said.
The campaign will reach out to people falling behind in payments with direct-mail postcards and visits from state officials, guiding them to state agencies and nonprofit organizations for help.
"We will be using every creative available outreach tool to ensure that Marylanders in distress are aware of their rights and aware of their options," Perez said. "Passing laws is of minimal benefit if people aren't aware of the new rights that they have."
O'Malley also is scheduled to testify before Congress next week about his administration's approach to the housing crisis, said Rick Abbruzzese, a spokesman for the governor.
Maryland's legislation would provide "immediate relief" to homeowners facing foreclosure, Perez said.
"There's a lot of talk at the federal level, but there's seldom any action, so that's why the governor has taken the bull by the horns at the state level," Perez said.