Lawmakers adopted emergency regulations Tuesday targeting mortgage loan services, which they said aren?t doing enough to help the record number of Marylanders facing foreclosure.
Gov. Martin O?Malley invited loan servicers to a meeting next week to create standard procedures for responding to homeowners facing foreclosure. An estimated 50 percent of the nearly 10,000 Marylanders facing foreclosure will never contact their loan servicers for assistance, O?Malley said, and those who do often complain of poor customer service.
“We can?t do this if we can?t get the loan servicers on the phone and better partner with us in mitigating damages,” O?Malley said. “This is not something the government can do alone.”
Banks foreclosed on more than 9,700 homes in the fourth quarter of 2007 compared to 7,000 the previous quarter. Experts estimate 25,000 subprime mortgages will go into foreclosure by the end of next year.
Loan servicers are largely ignored under O?Malley?s sweeping reform package currently before the legislature. Lawmakers are considering criminalizing mortgage fraud, allowing more time before foreclosures are finalized and requiring foreclosure notices to be personally served.
The state is also cracking down on loan scams and servicers who evade delinquent homeowners who are seeking help, said Tom Perez, secretary of the Labor, Licensing and Regulation Department, including an investigation of Ocwen, one of the state?s largest servicers, based out of Palm Beach, Fla.
“We want a specific, transparent and nimble system for responding to homeowners in crisis,” Perez said.
Legislation that took effect Tuesday will require loan service companies to provide the state with monthly lists of homeowners who have adjustable-rate mortgages that are about to reset to higher interest rates. The state can then offer those homeowners help, Perez said.
Many homeowners facing foreclosure are “too embarrassed,” to come forward on their own, said Billy Cogman, executive director of Kairos, a nonprofit housing corporation.
“They are ashamed,” Cogman said. “But they?re just like us.”
