Thank you all very, very much for being here.
We’re joined by Secretary Skinner and Secretary Perez, some of our partners from nonprofit organizations and also, Lieutenant Governor Brown.
And I wanted to take this opportunity to update you about a very serious challenge and crisis that we’re facing as a country and as a State. It has to do with the rising numbers of foreclosures that are happening in our State. And I wanted to bring you up to date on some of the things that we’re doing and also, quite honestly, ask for your help.
You know about fifty percent of people that go through foreclosure never bother to pick up the phone to call and ask for help. Half the people that go through foreclosures don’t even bother to try to fight it. And they’re ashamed, they put their head in the sand, assume that it’s all beyond their ability to control it and never reach out for help.
So, any help that you could give us in getting out this number — it’s 1-877-462-7555. That’s 1-877-462-7555. That is a hotline number that connects our neighbors to our Department of Housing and Community Development.
And just as we encouraged people over the weekend, at a terrific forum that Congressman Cummings actually launched and initiated at Poly Western, we’re encouraging people to call that number and we will do everything in our power to hook you up with a nonprofit housing advisor, counselor, who — without a profit motive getting in the way — can help you figure out how we might be able to help you fight this foreclosure, save your home, and mitigate the damage that is on the horizon.
We’ve been working very aggressively to address this problem and try to get in front of this wave. You all have seen actions and meetings taking place at the national level as well.
You’ve been hearing me talk about some 7,000 people that are going through foreclosure in the State of Maryland. Fourth quarter numbers are in and we learned that the numbers of homeowners facing foreclosure went up dramatically, jumping 39 percent from the prior quarter. So that’s more than 9,700 homeowners facing foreclosure in the State of Maryland.
Our top priority as an administration is to strengthen and grow the ranks of our middle class. One of the greatest threats to the strength and the growth of our middle class is the growing number of foreclosures in the State of Maryland. It is an escalating national crisis that threatens our very way of life. It not only threatens the strength of individual families, but also neighborhoods and, in a very real way, the financial security of our families. The strength and health of our communities depends on our ability to respond to this crisis and to do everything we can to mitigate against the damage that it threatens to do to neighbors and to Maryland’s middle class.
Together with Secretary Perez and Secretary Skinner, we’re working every day to try to get ahead of this wave. Our ability to meet these goals, to protect our families, depends on our ability to keep as many families as we can in their homes.
Let me update you on some of the steps that we have taken over the course of this last year.
We created the Bridge To Hope Loan Program, which offers small, no interest loans up to $15,000 to help as many families as we can to get square and get up to date, so that they can then refinance their mortgages hopefully into a sustainable rate that they are able to maintain.
A lot of times families find themselves in the Catch 22. They can refinance, but only if they can get current on their mortgage payments. So if families were current on their mortgage payments, they wouldn’t be picking up the phone and calling the 800 numbers to begin with.
So this Bridge To Hope loan is a $15,000 no interest loan that we hope can be used with our housing partners, like St. Ambrose and other nonprofits, to help families get square so that they can then get into a loan that they can sustain.
And last summer, we provided more than $1.2 million in grants to housing counseling organizations — $1.2 million in grants to housing counseling organizations to provide them with more capacity to assist homeowners to refinance or restructure their loans.
We’ve also stepped up our enforcement efforts and authorized four new investigators to our Commissioner of Financial Regulations, to better enable us to respond to complaints that we were receiving from consumers about unscrupulous players that are in this business and, even worse, that come swooping in when families are headed into crisis.
We have proposed sweeping legislative reforms to tighten lending standards, crack down on fraud, and to lengthen the foreclosure process. Right now in our State we have a fast track to foreclosure. There is legislation pending in the general assembly that will slow that process down, because when families are facing the loss of their home, the two things they do not have are time and money. And that’s especially true, given some of the outdated and draconian fast track to foreclosure laws that we have in our State.
I want to take this opportunity to urge the general assembly to act as quickly as possible to pass those bills. Every day we wait leaves more people at risk. We need meaningful reforms to keep us from repeating this vicious cycle.
We also need to take some immediate steps that will provide relief now for families facing the immediate threat of foreclosure. Today I understand that we have now seen the approval of new emergency regulations that allow our Commissioner of Financial Regulation, Ms. Raskin, to collect data from loan servicers, detailing their loss mitigation and loan modification efforts.
What does that mean in English? It means that Maryland now will be only the second State in the nation that is collecting detailed information from loan servicers that will tell us exactly which families are headed into foreclosure, so that we can reach out to them with the array of services and also the proper counseling that can hopefully keep them in their homes.
It means that we’ll be able to track what servicers themselves are doing to mitigate against this loss. And it also means that we will have targeted information on families in need so that our State can take proactive measures to help them stay in their homes.
Everyone in the mortgage industry has said that they want to help homeowners avoid foreclosure. You hear time and time again when people get together to discuss this that nobody wins in a foreclosure. Well, if nobody wins in a foreclosure, why is it that only two percent of those that are in foreclosure ever get out of it or renegotiate with the mortgage companies to stay in their homes.
Part of this stems from the fact that none of us were set up to handle this sort of crisis in the past. You know, it was all about sell, sell, sell, do whatever we could to get people into the homes. And there was not the mechanism set up at the national level with the big companies that are servicing these loans to help respond to the mitigation loss.
So, in addition, our Banking Commissioner, exercising her regulatory authority, has also done some other things. We’ve launched an examination of the practices of Ocwen, a major servicer of Maryland loans, after numerous complaints against the company.
And today, I am going to be sending a letter asking the major servicers of loans in our State to come to the table for an emergency work session next week to help us meet this challenge head on. I’ve asked them to come in on Tuesday, February 26th, and meet with us here at the State House.
Far too often, homeowners who try to take action to avoid foreclosure are unable to even get their loan servicer on the phone. We have been pumping money into the nonprofit entities that are out there and in every jurisdiction virtually of our State, but they encountered the same problems. Once they have a homeowner who is trying to renegotiate, it’s very, very difficult for them to get the loan servicer on the phone, or anyone that has the authority to renegotiate that loan, so that we can mitigate against the loss.
Lieutenant Governor Brown and I are committed to providing significant State resources to help Maryland families avoid foreclosure. We have provided State grants to nonprofit housing counselors and direct financial resources to homeowners. But we can’t do this unless we can get the loan servicers to be more customer responsive and better partners with us in mitigating against this damage.
This is not something the government can do by itself. We need the loan servicers to join with us, not from some place out in Topeka, Kansas at a 1-800 number, but here in Maryland, so that we can reach out and do a better job of mitigating the damage that promises to be done to 9,700-some Maryland homeowners and their neighbors if we don’t get in front of this and become much more aggressive and proactive in meeting this challenge.
We’re prepared to offer Maryland resources, we’re prepared to turn over the staff resources and further bolster the network of nonprofits to help in this. But if we can’t get the loan servicers to the table to actually help us in this process, then all of this work is for naught.
So this meeting will give us the opportunity to sit down with the servicers, to let them know how much further ahead Maryland is than some other States and how willing we are to partner with them. But we really need them to come to the table.
I want to thank you for joining us today.
But again to update you, fourth quarter numbers are in and the crisis continues to grow in our State, over 9,000 Marylanders are facing foreclosure. We have emergency regulations that were approved today, which will make Maryland only the second State in the nation to be able to require servicers to provide us with detailed information so that we can reach out to those that are facing foreclosure and hopefully mitigate against this damage with them.
Also, there is an examination that was opened up on Friday in response to unscrupulous — I mean, complaints of unscrupulous practices by consumers.
And, we are going to have an emergency work session here on February 26th where all of us will be sitting down with the major loan servicers, so that we can get ahead of this curve. We could become the first State in the nation that actually co-locates with authority, as people from the State and nonprofits and the loan servicers, so that we can show that we can actually do something in mitigating this damage and keeping more homeowners in their homes.