Governor Announces that Maryland Passes Emergency Regulations to Track Loan-Servicers



Maryland Passes Emergency Regulations to Track Loan-Servicers;
Maryland Becomes 2nd State in the Nation to Require Data on Loan-Servicers

ANNAPOLIS, MD (February 19, 2008) – Governor Martin O’Malley today called for an emergency work-session with mortgage loan servicers to help find real solutions to the foreclosure crisis and protect middle class families from losing their home. Joined by Department of Labor, Licensing and Regulation Secretary Thomas Perez and Department of Housing and Community Development Secretary Raymond Skinner, Governor O’Malley announced new emergency regulations and other initiatives to protect homeownership in Maryland and urged homeowners to seek help early if they are facing foreclosure.

“In a very real way, the financial security of our families and the strength and health of our communities depends on our ability to help preserve and sustain homeownership in our State. It is time to make the loan servicers part of the solution to protect our families,” said Governor O’Malley. “Maryland has committed significant resources to help Maryland families avoid foreclosure and stay in their homes, and we are prepared to work with loan servicers to develop a framework and a model for large-scale relief for homeowners that will keep people in their homes.”

During the work-session, the Governor will call for a public agreement with major servicers to set a standard for consistent, timely and sustainable loss mitigation services for Maryland homeowners. Governor O’Malley also announced that Maryland has adopted new emergency regulations requiring reports from mortgage loan servicers detailing their efforts to help homeowners facing default and foreclosure. Maryland is only the second state in the nation to require this data.

The regulation requires servicers to provide DLLR with lists of homeowners who have adjustable rate mortgages that are about to reset to higher interest rates. DLLR will use this information to reach out to those homeowners, providing them with information on resources available to help them.

In addition, DLLR’s Commissioner of Financial Regulation is examining the operational systems, practices and procedures of Ocwen, one of the largest servicers of Maryland loans. The Commissioner will review a sample of the company’s Maryland mortgage loan servicing files.

“Everyone in the mortgage industry has said they want to help homeowners avoid foreclosure. We want to ensure their actions are matching their words,” Secretary Perez said. “This data collection will shine a bright light on services, and will help DLLR help homeowners.”

Governor O’Malley also called on homeowners to take advantage of DHCD’s “Bridge to Hope Loan Program,” which will provide gap loans at zero percent interest to homeowners who are a few months behind in their mortgage.

“This statewide program provides Maryland homeowners with short-term relief to maintain homeownership by preventing residential mortgage foreclosures resulting from borrowers experiencing financial difficulty caused by either a sub-prime or exotic mortgage,” said Secretary Skinner.

In the fourth quarter, Prince George’s, Montgomery, Washington and Worcester Counties saw the number of foreclosure events double from previous quarter. In other counties, such as Kent, Garret and Somerset, the numbers nearly tripled. Statewide, Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.

According to RealtyTrac, one of the major providers of property foreclosure data, Prince George’s County continued to have the highest number of foreclosure events, with 2,732. Montgomery County had the second highest number of events, with 1,310, while Baltimore City ranked third with 1,268 events.

Governor O’Malley’s announcements today are in addition to sweeping reforms proposed for the mortgage industry, including raising the bar for licensing, tightening lending standards and eliminating defective products from the market in Maryland.

The various measures represent a comprehensive effort to combat rising foreclosure rates and protect Maryland homeowners in the future. Governor O’Malley called on lawmakers to act swiftly to pass his proposals and provide relief to Maryland homeowners.