Nov 7, 2008 8:17 pm US/Eastern
Mortgage Servicers To Help Md. Homeowners
ANNAPOLIS, Md. (WJZ/AP) ―
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Gov. Martin O'Malley said Friday he's hoping an agreement with six mortgage servicing companies to help struggling homeowners avoid foreclosure will pressure other companies to join the effort.
WCBS
Gov. Martin O'Malley says the state's plan to help homeowners avoid foreclosure is moving forward.
Pat Warren reports six mortgage companies have agreed to work with the state to assist people in danger of default.
The six companies service about 23 percent of home loans in Maryland, and the governor warned that their leadership should be an example to other companies in easing the foreclosure crisis.
He said he hoped to add new company names to the agreement soon.
"I don't know whether that's going to happen, but we're going to try to do that," Governor O'Malley said. "And if I'm not able to share that with you, I will share with you who the worst ones and the most intransigent and the most irresponsible ones have been."
The companies -- HSCB, Ocwen, GMAC ResCap, Litton Loan Servicing, AmeriNational Community Services and Citi, have agreed to a cooling off period for homeowners who are in trouble -- creating a 60-day period when foreclosure actions could not be taken.
Companies have agreed to pool together representatives to work with distressed homeowners.
They also agreed to either create or continue company policies to give their employees incentives to modify loans and not create incentives to encourage foreclosures.
The companies will document communications between employees, agents and borrowers to increase transparency and create a case history.
"If we all know, then everybody knows, and we can quickly get to those who can be saved rather than wasting time on those that simply cannot be saved," Governor O'Malley said.
The agreement among the companies is another step O'Malley's administration has taken to address the home mortgage crisis that has affected the nation.
"I went from having $40 left over from one paycheck a month -- not even including any other bills just the mortgage -- to now having enough to pay my car payment if I want and take the kids to dinner," said one Marylander.
Laws backed by O'Malley have bought time in the foreclosure process, extending it to 150 days to give homeowners more time before a foreclosure sale.
Thomas Perez, the state's secretary of labor, licensing and regulation, said the agreement will help make better use of that time.
"These servicers behind me have recognized that there are times when a half a loaf is better than no loaf at all and compromise can enable everybody to make the best out of an imperfect situation," Perez said.
Maryland also has made mortgage fraud a crime and required lenders to verify a borrower's ability to repay a loan and strengthening the licensing requirements for mortgage professionals
"There are some right now who have been so intransigent, so irresponsible, so cavalier and so down right arrogant in the face of the damage that's being done to homeowners, that it really makes you grateful for the good citizens that are standing here," said Governor O'Malley.
Governor O'Malley says two weeks from now he hopes to be able to announce more lenders signed into agreement.
(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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