Governor’s Steps Against Foreclosures Lack Punch

February 8th, 2008

Democrat Governor Martin O’Malley is facing criticism from both sides. Advocates representing consumer rights and few legislators are of the opinion that his proposals are not comprehensive enough to tackle the foreclosure crisis. On the other hand the lender’s group feels that the bills are too tough for them and need to be toned down.

A string of bills has been initiated by O’Malley to increase the time gap for a foreclosure to be effective, make a new statue that would brand mortgage fraud as a criminal offence and ban the transfer of property in fraudulent foreclosure rescue schemes.

Last summer the bills had gained popular support but this year some law makers are introducing bills of their own trying to change the tone of the previous ones. State Senator Democrat Anthony Muse from Prince George County has come up with a draft that imposes short term ban on foreclosing on houses mortgaged with sub-prime loans. The district which Muse represents has been badly hit by foreclosures. He wants prompt action to stem the tide and address the crisis. Unfortunately none of the proposals will start becoming effective until the end of the year. But Muse wants action on a war footing.

A panel was set up by the Senate that communicated with lenders, real estate representatives, legal experts as well as housing counselors The committee room was packed with 50 people. Most of them were all praise for the legislation but many had other suggestions to put forward. The next session of the General Assembly will give top priority to these.

The Newspaper lobby did not take to the suggestion of reducing the number of foreclosure insertions from three to only one. The administration explained that this was a cost saving exercise. But Christopher Eddings publisher of The Daily Record said that this would keep the problem hidden away from public knowledge. His paper charged $350 for insertions.

The realtors group pointed out that notaries would be at the receiving end if the question about criminality arose in the case of foreclosure frauds. Their only job was to identify the person signing the mortgage documents. By increasingly making foreclosure consultants liable for any shortcomings would result in the moving away of many genuine professionals from dealing with distressed houses.

A representative of the Attorney General’s office said that although foreclosures will not stop it will be somewhat checked.