LAWMAKERS REACT by ABC2 News Investigator Tisha Thompson
Posted June 13, 2007 Governor Martin O’Malley (D-MD) and his cabinet have a new plan to halt the rising number of record foreclosures in Maryland.
The Governor launched the “Maryland Homeownership Preservation Task Force” a little less than a month after ABC2 News Investigator Tisha Thompson was the first to tell you how lenders can seize your home in 15 days…and they don’t even have to tell you about it.
Walking gingerly on his broken leg, the Governor chose Dundalk’s working-class neighborhood to launch his task force. “A lot of times people think they failed or they didn’t read the 42 pages of small print before they realized the mortgage that was affordable the first year is now a rock around their family’s neck by year two or three,” O’Malley says. “So we need to do a better job at outreach.”
O’Malley says he wants to help people like Dana Pryor, a highly-educated mother of four who lost her home in a recent foreclosure. ABC2 News introduced you to Pryor in May, when she said, “You can’t buy a home in 15 days, but amazingly enough you can lose one in 15 days.”
Now O’Malley says, “Maryland has one of the shortest time periods that allows lenders to take homes from homeowners if people fall behind in their mortgages.”
In addition to fixing the 15 day law, O’Malley’s Task Force will provide $111 million for home counseling and mortgage assistance. The Governor also gave DLLR Secretary Thomas Perez (D-MD), the man in charge of regulating the state’s mortgage industry, four more investigators.
“Adding four investigators will make a world of difference,” Perez says. He plans to use the investigators to root out brokers who used predatory loans to take advantage of homebuyers.
“If your intention is to prey on a consumer’s earnest desire to own a home and stay in a home, we will find you. We will haul you in and we will bring you to justice.”
Posted May 30, 2007 Reaction is pouring in from you – as well as Federal and state lawmakers – our ABC2 News Investigation “Mortgage Meltdown.”
In our eight-part series, we showed you how lenders can take your home in just 15 days and don’t even have to tell you about it. We also showed you how hard it is, even for lawyers and lawmakers, to decipher a standard loan agreement. And our exclusive ABC2 News maps showed you how neighborhoods with high minority populations are becoming foreclosure hotspots.
ABC2 News put a poll on its website asking viewers: “Is Maryland’s foreclosure law too extreme?” 84% of you said, “Yes.”
Senator Barbara Mikulski (D-MD) and her staff wrote ABC2 News Investigator Tisha Thompson an email the day after the story aired. The email read, “Kudos to WMAR for putting together such a thorough investigative report! I really applaud the detail you guys went into; this is critical information to get out to the communities.” Mikulski than explained she is working in the Senate to pass the Borrower’s Protection Act because, as she says, “homeowners often fall prey to intentionally confusing mortgages that appear affordable at first, only to become a crushing hardship.”
But most of the problems we uncovered can only be fixed at the state level.
State Senator Lisa Gladden (D-41st District) watched our series and now has a list of reforms she wants to make. “We need to change the agreements so they are in standard language and in large font,” she says. She points to how our series found as many as 50% of minorities received subprime loans when they qualified for prime loans and says, “We’ve got to give people the opportunity to get prime mortgages.”
Gladden says the first thing she’s going to tackle will be that 15 day foreclosure law – the fastest in the nation. “We need to insure that when the companies come forward and say, ‘we’re going to take your home,’ you’ve got at least 30 days,” she says. "Given the ASPCA is going to ask for a longer period of time before you adopt a dog, it seems to me the calamity of losing a house ought to take longer than two weeks and one day."
The most powerful man in Maryland’s House of Delegates agrees. "15 days seems to me to be a pretty limiting amount of time,” says House Speaker Mike Busch (D-30th District).
Busch was also struck by an interview we did with Maryland Secretary Thomas Perez, the man in charge of regulating Maryland’s mortgage industry. In our story “The Color of Credit,” Perez told ABC2 News Investigator Tisha Thompson, "One of the things we can't currently do that I would like to see changed is I want to be able to develop the capacity to identify mortgage brokers who have a disproportionate number of loans that go into foreclosure."
The power to do so comes from lawmakers like Busch, who says Perez’s request “should be a serious consideration.” Busch says “if there is a mortgage company that has more foreclosures than another, than you want to know what the pattern is so you can regulate that and find and penalize them."