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Lawmakers consider slowing Virginia foreclosure process

The database has been widely criticized for gaps and errors, and the rise of MERS has been blamed for fueling the nation's mortgage mess, critics say.

Del. Robert G. Marshall (R-Prince William) said he filed the bill slated for consideration Monday because the current system has left title to foreclosed properties under a cloud. A hearing on the measure will take place on the holiday commemorating Martin Luther King Jr.

Marshall's bill would prevent the industry from bypassing county land records when mortgages are transferred, and require lenders and investors to file documents in the land records documenting the chain of title before foreclosing.

"The aim is to give confidence to the American public that the title they have is a good title and its not being frittered away by a bunch . . . on Wall Street who couldn't give a rat's foot about them," Marshall said.

Asked for comment on the bill, MERS spokeswoman Karmela Lejarde said by e-mail that the company is reviewing it.

Del. David B. Albo (R-Fairfax), who chairs the Courts of Justice Committee, said by e-mail that in some cases Marshall's bill "would bar foreclosure all together" because it might be impossible to reconstruct and record every link in the chain of title to a loan that has changed hands repeatedly. The bill could hurt anyone whose investment funds include mortgages, he said, because "there is no way to kick the non-paying homeowner out of the house and get someone else in it who will pay."

House Speaker William J. Howell (R-Stafford), who has served on the board of a Virginia bank, said the type of filing requirements that Marshall has proposed would probably slow the mortgage market. Howell also opposed requiring lenders to foreclose through the courts, saying, "I think the process in Virginia has served both the creditors and the borrowers well."

In the Senate, A. Donald McEachin (D-Richmond) has proposed that the state switch to court-supervised foreclosures.

"We don't deprive people of their life nor do we deprive them of their liberty without due process and having access to the court system, so it seems odd to me that we would allow their homes to be taken . . . without that same sort of due process," McEachin said.McEachin is scheduled to appear with Marshall at a news conference Monday, and Marshall said the two have found common ground on the mortgage issue despite being "polar opposites on social issues."

Maryland's foreclosure process was once similar to Virginia's, but in recent years Maryland has added protections for homeowners. As of Friday morning, no bills on mortgages or foreclosures had been introduced in the new legislative session.

Sen. Brian E. Frosh (D-Montgomery), who chairs the Judicial Proceedings Committee, said he was preparing a bill to give homeowners better information about the holders of their mortgages so they would know who to deal with when facing foreclosure.

"If somebody tells you that the owner of your mortgage is a faceless electronic company, there's nobody to talk to, nobody to deal with, and you almost guarantee foreclosure," he said.

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