O'Malley eyes mediation before foreclosure
By: David Sherfinski
Examiner Staff Writer
October 28, 2009
Maryland Gov. Martin O'Malley plans to introduce legislation that would require mediation efforts before foreclosure processes began, a spokesman said Tuesday.
The bill would provide an incentive for lenders who drag their feet to do more to help struggling homeowners, said Shaun Adamec, a spokesman for O'Malley.
"This is a way to level the playing field," Adamec said.
The governor is committed to putting a bill before the General Assembly next year that mandates mediation for homeowners facing foreclosure, he said.
Local housing officials were open to the idea.
"It has some potential to be helpful," said Rick Nelson, head of Montgomery County's Housing and Community Affairs Department. "When you force these things to occur prior to a gavel coming down," it improves the chances for families to stay in their homes.
Giving borrowers more time to work out their loans would be helpful, but delaying the foreclosure process indefinitely would not be, said Kathryn Pettit, a senior research associate at the Urban Institute's Center on Metropolitan Housing and Communities.
"Anything that brings the banks to the table" would be a positive move, she said.
O'Malley broached the subject during an event to highlight National Pro Bono Week and encourage lawyers to continue providing counseling services for families at risk of foreclosure. More than 900 lawyers have been trained in the state program, and 643 lawyers have provided free legal counseling to 1,794 Maryland residents.
Donna Hurley, executive director of Housing Options and Planning Enterprises Inc., agreed that counseling and workshops on foreclosure prevention were important to "make people understand they're not alone." HOPE is a nonprofit based in Oxon Hill that provides housing and credit counseling.
More than 9,000 foreclosure actions were filed in Maryland in the first quarter of 2009.
"Despite this overwhelming response from the Maryland Bar, more volunteers are needed to help stem the tide of this foreclosure crisis, one of the most important pro bono challenges of our time," O'Malley said.
The Associated Press contributed to this report.
