Governor O'Malley Urges Congress to Address Foreclosures; Will Attend Emergency Community Forum
Washington, D.C. (April 10, 2008) – Governor Martin O’Malley today testified before the House Committee on Financial Services in support of the FHA Housing Stabilization Retention Act of 2008, urging Congress to take steps to address the foreclosure crisis facing Maryland and the nation. This evening he will join Senator Ulysses Currie, Lieutenant Governor Anthony Brown and state and local officials at an emergency community forum in Prince George’s County organized to educate residents about options to avoid foreclosure.
Today’s events came on the heels of the enactment of sweeping State legislation to reform lending practices in Maryland, make the foreclosure process fairer for homeowners and to crack down on mortgage fraud and rescue scams.
“We are facing some difficult economic times which require urgent action. Homeownership is the cornerstone of the American dream – a pathway into the middle class for so many who dream of building better lives for themselves, and for their families,” said Governor O’Malley. “In Maryland, we have an aggressive strategy to address the foreclosure crisis, but our ultimate success depends on a successful partnership with the federal government to help keep homeowners in their homes.”
The Governor’s testimony before members of Congress focused on the need for federal and state governments to work in partnership to adequately address the foreclosure crisis that has swept Maryland and the nation, threatening families, communities and our quality of life. The FHA Housing Stabilization Retention Act of 2008 would help homeowners avoid foreclosure by better enabling the Federal Housing Administration (FHA) to insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. It would do this, in part, by providing approximately $10 billion directly to states to enable them to purchase foreclosed properties.
Later this evening, Governor O’Malley, joined by Lt. Governor Anthony Brown, will attend an emergency foreclosure forum, hosted by Senator Ulysses Currie and the Perrywood Civic Association, to provide homeowners in attendance with information on housing and foreclosure issues. Perrywood is at the center of the foreclosure crisis in Maryland – nearly one in five homeowners faced foreclosure in the last quarter of 2007.
“Owning a home is the most fundamental American Dream. We must do all we can to strike the appropriate balance between lenders and borrowers so that people purchase homes within their means,” said Lt. Governor Anthony Brown. “Education is key and I am proud of what our administration is doing to address the foreclosure crisis.”
“Many homeowners in Prince George's County are facing a foreclosure emergency and, as their Senator, it is my job to work with them and help find alternatives to foreclosure,” said Senator Ulysses Currie. “The Governor's emergency foreclosure legislation will help thousands of homeowners in the future, and tonight's forum is an attempt to help families in the short-term by finding ways to keep them in their homes.”
Governor O’Malley, Administration officials and the General Assembly have worked aggressively over the past year to address what has become the worst housing crisis the nation has seen since the Great Depression.
Last summer, Governor O’Malley created the Homeownership Preservation Task Force, which brought stakeholders together and made recommendations for a comprehensive package of reforms to assist homeowners facing imminent foreclosure and prevent future crises. From those recommendations, Governor O’Malley proposed four pieces of legislation that received overwhelming support in the General Assembly and were signed into law over the last week.
As a result of the new laws, the foreclosure process in Maryland has been lengthened to approximately 150 days, providing homeowners with more time and notice before a foreclosure sale. Individuals who commit mortgage fraud are now subject to criminal penalties, and “foreclosure rescue” transactions have been banned. The measures also reformed lending practices by banning pre-payment penalties on mortgage loans, requiring lenders to verify a borrower’s ability to repay a loan and strengthening the licensing requirements for mortgage professionals.
Governor O’Malley has also taken additional steps to address the foreclosure crisis. Earlier this year he announced the “Bridge to HOPE” Loan Program, which will provide small gap loans at zero percent interest to homeowners facing difficulty, giving them time to get back on their feet or find a solution. Families and individuals facing the possibility of foreclosure should call 1-877-462-7555 or visit www.MDHOPE.org for assistance.
The Governor also called on and met with mortgage loan servicers in emergency work-sessions to work toward a public agreement to set a standard for consistent, timely and sustainable loss mitigation services for Maryland homeowners. The work-sessions were called to help find real solutions to the foreclosure crisis and protect middle class families from losing their homes. Talks with servicers are ongoing.
