Gov. Martin O’Malley pleaded with members of Congress on Thursday, asking them to move quickly on legislation designed to relieve borrowers and lenders caught up in the foreclosure crisis.
While touting his own legislation signed last week to tighten regulations on loan servicers and to give borrowers more time between default and foreclosure, O’Malley told members of the House Committee on Financial Services that statewide solutions were not enough.
“Although we are making steady progress in Maryland, our ultimate success depends on a successful partnership with the federal government,” O’Malley said, adding more money was critical.
Recent plans floated by the Bush administration and Democrats in the House of Representatives both call on the Federal Housing Administration to help solve delinquent borrowers’ woes by offering opportunities for refinancing and loan forgiveness. The Democrats’ House plan comes with a $15 billion price tag, said U.S. Rep. Maxine Waters, D-Calif.: $7.5 billion in zero-interest loans and $7.5 billion in grants.
“Our Achilles’ heel has been our inability to come up with those funds to help homeowners and save neighborhoods,” O’Malley said, later adding “we needed those funds months ago.”
Crucial to solving Maryland’s crisis is the flexibility for states to direct money where it needs to go, the governor said, explaining that while one in 500 homes in the state is going through foreclosure, the number plummets to one in 72 homes in Prince George’s County.
Recent programs offered by the state such as Bridge to Hope loans for troubled borrowers have been “slow going,” O’Malley said, because the refinancing option is available only to people who are current on their payments. Options are needed for people who have already slipped into a cycle of missed payments, he said.
