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Maryland's Impending Foreclosure Mediation Law comes under criticism



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By : John Smith    99 or more times read
In contrast to the position taken on Maryland’s recent foreclosure mediation legislation by the Executive Director of St George’s County Coalition for Home Ownership Chad William, there are vociferous others who believe that the regulations are fatally flawed, will slow down the foreclosure process, and harm Maryland homeowners (and their neighbours) by holding back the rate of economic recovery.

Under the good old bad old rules a Maryland foreclosure sale took place automatically as soon as possible after 150 days of default had expired, and regardless of the type of real estate. In April 2008, however, State policy was changed by introducing new foreclosure processes for residential property, the purpose being to allow more time for mediation. This extended the theoretical date of sale by 75 days to 225 days after default occurs – and also added between $250 and $750 to the cost of foreclosure born by lenders.

Maryland law will change again on 1 July 2010, when a new category of owner occupied residential property will institute a fresh set of rules governing residential real estate dispossession.

Opponents of these measures argue that the latest amendments will confuse the process further by adding several new permutations, as follows:

  • A bank or other lender is debarred from proceeding to sale for a further 28 days if it is unable to prove that all available loss mitigation options have been thoroughly investigated.

  • Sale may also not take place while mediation is in process, adding an additional 60 to 90 days to the exercise.

  • If a final-loss mitigation affidavit was not included in the upfront documentation, and no request for mediation is submitted, then the time from default to sale stretches out to around 285 days.

  • To make things even harder for the lender, the foreclosure filing fee will jump from $125 to $425 on 1 July 2010 too.

Opponents of what they believe is further convoluted thinking by the Maryland State Legislature are at pains to point out that government budgets have not been increased to allow for extra work in Courts – the net result, they say, will be an even more clogged pipeline, and, inevitably increased median foreclosure time.

In the interim, the opposition lobby is at pains to point out, banks will not receive their dues, or homeowners associations their levies. Put succinctly, the State of Maryland is adding to the burden of law-abiding society while defaulting borrowers continue to sit out the stalemate in the comfort of their homes. Moreover, compliant American households will be unnecessarily longer faced by the prospect of abandoned property next door or across the street, driving the value of their nest eggs further down.
Original Post: Maryland’s Impending Foreclosure Mediation Law comes under criticism on ForeclosureDataBank.com.

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