Maryland
Passes
Emergency Foreclosure Law
On
April 3, 2008, Governor O'Malley signed emergency legislation designed
to protect homeowners from unfair foreclosure practices. Many recent
foreclosures resulted from predatory lending practices and creative
financing that allowed some home buyers to purchase homes that may
have been more expensive than what was in the buyer's best interest.
In some cases, buyers have even been sold on loans designed for people
with poorer credit, when their credit was good enough to allow for
more favorable terms. The federal government has already dealt with
many of these issues, but the state of Maryland is taking action to
provide addition layers of protection for the consumer, and to protect
consumers that may have already been victimized.
The
new law requires the license number of the lender to be recorded on
loan documents that get recorded into the public record. This allows
the state to more easily track lenders which have higher rates of
defaults and foreclosures. The law also increases the minimum length
of time that a foreclosure can occur after default and makes it easier
for a borrower to prevent the foreclosure sale by coming up with the
past due amount.
A
second law allows property to be taken from an owner, if that owner
gained the property through, or in connection with, mortgage fraud.
It also establishes severe criminal penalties for anyone shown to
have a pattern of committinng mortgage fraud. Both laws took effect
immediately upon their signing on April 3rd.
