Sweeping Bills Passed To Help Homeowners

Perez said the legislation overhauls lending practices and seeks to prevent the kinds of predatory loans that contributed to the mortgage crisis.

Steven A. Silverman, chief of consumer protection under Attorney General Douglas F. Gansler (D), said the legislation protects homeowners against "foreclosure scams and shady lending practices."

The mortgage-lending industry largely supported the administration's proposals. Kathleen Murphy, president and chief executive of the Maryland Bankers Association, attributed the consensus to O'Malley's Maryland Homeownership Preservation Task Force. The group included lawmakers, community advocates and industry leaders who reviewed mortgage laws and came up with ideas for change.

"All of that time deliberating the issues, I believe, has resulted in what is a very good package that will provide meaningful reform for borrowers but also continue to have an environment in the state that legitimate lenders will want to lend in," Murphy said.

Phillip Robinson, executive director of the nonprofit group Civil Justice, which provides assistance to homeowners facing foreclosure, said the legislation, in particular the extension of the foreclosure timetable, will make "a huge difference."

"Those homeowners that have a legitimate defense will have much more of an opportunity to present that defense than they do under the current process," Robinson said.

The extension affects those who face foreclosure starting after the bill is signed but does not change foreclosures underway.

Lawmakers also are weighing a proposal to require people seeking subprime mortgages to meet with independent credit counselors before signing on to risky loans.

The number of people losing their housing in Maryland has risen at a startling pace. In February, more than 4,000 foreclosure actions were taken in Maryland, a ninefold increase from February 2007, according to RealtyTrac, which maintains foreclosure data.

O'Malley's bills have received overwhelming support in the legislature, although some lawmakers from suffering communities questioned whether the measures will do enough to help people who have lost their homes or are behind in their payments.

"They need a federal bailout from Congress," Del. Dereck E. Davis (D-Prince George's) said.

Sen. Thomas M. Middleton (D-Charles) said the state government "just doesn't have the financial wherewithal to really help people out."

Del. Veronica L. Turner (D-Prince George's), who represents hard-hit Fort Washington, said her constituents are thankful for any help they can get. "My constituents are calling me. They need help," she said. "A lot of people have already lost their homes before the help came."

Across the country, hundreds of bills are pending in legislatures to address the mortgage-lending industry, said Heather Morton, an analyst at the National Conference of State Legislatures.

But Maryland is at the forefront in developing a comprehensive package of laws to stem the tide of foreclosures, said Uriah King, a policy analyst at the Center for Responsible Lending. "I think Maryland, in particular, has taken a really strong step forward in addressing the underlying causes of the foreclosure crisis, particularly the reckless underwriting," King said.

Perez said he is receiving calls from his counterparts in other states asking "what we did and how we did it."