Foreclosures in Maryland have doubled this year, said Thomas Perez, Secretary of the state Department of Labor, Licensing and Regulation.
The shattered housing market has largely been responsible for the nation’s economic crisis, and in Maryland, foreclosures have jumped from 22,000 in 2007 to nearly 50,000 this year, Perez said at a University of Maryland, Baltimore conference about the economy.
Predatory lenders have targeted low-income minorities, and about half of black residents’ mortagages are subprime, said Perez, a civil rights attorney.
“It’s a trainwreck that has disproportionately touched people of color,” he said.
The university’s conference, “The Subprime Meltdown: Causes, Consequences and Solutions,” brought together professors, journalists, and federal and state financial experts from throughout the country on the same day Congress passed a $700 billion rescue plan for the struggling investment banks on Wall Street.
But many have decried the bailout because the average homeowner is not getting the same help.
“We’re not looking at the right problem here,” said Michael Greenberger, a University of Maryland law professor and former director of the Commodity Futures Trading Commission.
“My immediate reaction here is, don’t bail out the banks — help the housing market.”
Other experts believed that executives at Wall Street companies, such as Lehman Brothers, would be indicted for failing to disclose all details about loans they gave.
“Seven hundred billion dollars is just way too much for no one to go to jail,” said Christine Hurt, co-director of the business law and policy program at the University of Illinois College of Law. “There has to be criminal wrongdoing if the federal government has to assess every American citizen $2,000 to pay for it.”
Hundreds of subprime mortgage-related lawsuits have been filed in recent months, and for every one that is resolved, three more are opened, added Lisa Fairfax, director of the business law program at the University of Maryland School of Law.
Perez also said that while he does not trust the federal government to protect the middle- and lower-class workers, the state has tried to stand up for them.
“I don’t have faith in the alphabet soup of federal regulators because they historically haven’t looked out for the well-being of consumers,” he said.
The state has recruited 700 lawyers to work for free for disadvantaged residents, expanded the amount of time before homeowners in default are foreclosed upon and worked with loan servicers to refinance loans, Perez said.
“We’ve helped more people than ever before,” Perez said. “The challenge is that more people need our help than ever before.”
