GOVERNOR O’MALLEY, CONGRESSMAN CUMMINGS TESTIFY ON FORECLOSURE MEDIATION BILL

Bill to Increase Protections for Maryland’s Homeowners

ANNAPOLIS, MD (February 16, 2010) – Testifying before members of the Senate Judicial Proceedings Committee and the House Environmental Matters Committee, Governor Martin O’Malley and Congressman Elijah Cummings, today called for the passage of a foreclosure mediation bill that protects Maryland homeowners. In his 2010 legislative package, Governor O’Malley has introduced the emergency legislation that would give every Maryland family facing foreclosure the legal right to mediation with the lender seeking the foreclosure.

“I receive letters every day from Marylanders trying to make ends meet, as we work through this national economic downturn. Working together, and through the hard work and persistence of non-profit housing counselors and pro bono lawyers, many homes in Maryland have been saved. But too many of our fellow citizens continue to be put out on the street. Our work must continue,” said Governor O’Malley.

“The legislation the Committee considers today is designed to empower fellow Marylanders, putting them on a more equal footing with mortgage companies,” the Governor said in his testimony today. “It is designed to give borrowers the information they need at an early stage, as well as the right to have access to their lenders when they feel they are unfairly being denied a loan modification or other loss mitigation options.”

Governor O’Malley’s legislation heard today aims to give every Maryland family facing foreclosure the legal right to mediation with the lender seeking the foreclosure. Building on the O’Malley-Brown Administration’s bold reforms of the foreclosure process and timelines in 2007, the Administration remains committed to ensuring that those homeowners who are eligible for loan modifications are able to obtain them, and that others can pursue alternatives to avoid foreclosure or lessen its harmful impact. Borrowers who may be eligible for loan modifications to save their homes but find themselves facing foreclosure anyway should be afforded the opportunity to talk directly with their lenders to find a resolution before their homes are sold. This bill gives Maryland families the right to a foreclosure mediation process upon filing of foreclosure proceedings. It requires lenders/servicers to use the 45 day period prior to the filing of the foreclosure action more productively to achieve loan modifications where possible by requiring the Notice to include a loss mitigation application and other information helpful to the homeowner to prevent the loss of their home.

“During my 14 years in Congress, I have found that no issue has created more heartache in our communities than the current foreclosure crisis,” said Cummings. “It is not the job losses, nor the loss of retirement income, nor the damage to our economy that has hurt people the most. Because it represents the American Dream; a safe place for their family to grow and thrive, it is the loss of their home that has been the biggest catastrophe for many families through Maryland and the nation.

“We have never faltered in the belief that our country will survive this economic downturn, and the sun will come out. But so many people are asking themselves, when the storm does pass, who will have my job? Who will be living in my home? I am proud to support the Governor’s bill because it is the kind of creative policy-making that we need to weather this storm.”

During recent months, Congressman Cummings has hosted two foreclosure prevention workshops for area residents, will host a third next week, and has become a nationally leading voice on the issue of homeownership protection and foreclosure prevention. Cummings also introduced legislation to fund short-term bridge loans that unemployed homeowners to stay current on their mortgages while they get back on their feet. Working with others in the House, Cummings was able to secure three billion dollars in the recently passed House financial services regulatory reform bill to fund bridge loans.

In the past three years, Governor O’Malley signed into law what the Washington Post called some of the most “sweeping” legislation in America to combat foreclosure; the O’Malley-Brown Administration has reached agreements with multiple mortgage servicing companies to create a streamlined and transparent loss mitigation process; and through Judge Bell, 981 pro bono attorneys have been recruited to assist vulnerable families. Through the HOPE network, non-profit counselors – supported by state government – have assisted more than 35,000 Marylanders. In 2009 alone, DLLR secured $2.9 million in refunds from financial institutions for consumers. Through these reforms and by working together, more than 9,800 Maryland homes have been saved, and foreclosure events have reduced by 23 percent.