Some Movement on Foreclosures

Posted on March 28th, 2008 by saman

There is currently what appears to be nothing but bad news when it comes to real estate and home foreclosures. However there is some progress being made. Some institutions and government agencies are finding ways to help the distressed home owner.

Yesterday, Maryland homeowners got some good news when legislation proposed to help them cleared the House committee.

The Environmental Matters Committee approved a bill that would increase the amount of time before the foreclosure process can take place. This time could be stretched from fifteen days to four months. The bill also declares that mortgage fraud is a crime and someone who commits this type of fraud can get up to ten years in prison. They could also receive a five thousand dollar fine. They may get both.

The legislation has garnered broad support. However, some Republicans in congress do not agree with the provision in the bill that would let victims of mortgage fraud sue lenders for damages.

Another bill of the administration that focuses on vigorously prosecuting foreclosure rescues scams was recently approved by a panel and will soon go through the House.

Some government officials believe that the bills provide need protection for homeowners in Maryland and it is possible that some homeowners will avoid foreclosure.

Foreclosures have increased nationwide creating a slump in the housing market. Many owners of homes fell behind on mortgage payments as interest payments have increased. Many borrowers fell into trouble by taking out subprime loans. These loan targeted high risk borrowers with poor credit and low incomes.

The foreclosure rate in Maryland is not as high as it is across the country, but the amount of foreclosures jumped by one hundred fifty percent from 2007. Over thirteen thousand owners of homes faced losing their properties last year.

There are some homeowners that fell into foreclosure because of poor decisions but many fell into foreclosure because of means beyond their control. The new foreclosure bill would not only help lenders and homeowners, the bill provides for enabling the state to expose and track those who have been involved in bad lending practices.

The bills were recommended by a task force that had been formed in 2007 as a way to handle the steadily increasing foreclosures in that state.

Maryland has one of the quickest foreclosure processes in the country. The bill slows down the process. Under the new legislation, borrowers who are delinquent will have a forty-five day notice of a pending foreclosure. Borrowers will be provided with information that will tell them the steps that they can take to keep from losing their homes.

There is also a provision that would let plaintiffs sue for damages. Some people are fearful this. Some believe that this would open up a new area for trial lawyers and the expense of an already troubled industry.

Plaintiffs could collect damages for obvious violation of the laws that protect homeowners. However, few prosecutors have the staff available to look into cases of mortgage fraud so the consumer would have to have the ability to bring a suit.