What other sorts of consumer complaints do you receive?

We have payday lending. It's an ongoing battle in this state and every other state. We have an interest rate cap. It's 33 percent at the highest.

And we work hard to enforce it, and it's an ongoing battle.

Your office has had success with recovering fees from loan-modification consulting firms, many of which charge homeowners illegal upfront fees. How much have you recovered?

Through our efforts, we have been able to obtain roughly $200,000 of refunds for consumers over the past three years. While that's helpful, it is not a solution, as we have orders for multiples of that amount that will never be paid, as the provider is defunct.

More importantly, the consumer has wasted months in the process and now likely faces imminent foreclosure. In the end, we urge people that when someone offers to help you modify your loan for a fee, "don't pay, walk away."

How is the state's new mediation law — which allows homeowners to request a meeting with their lender before an auction can occur — working out?

Since the mediation law went into effect in July 2010, the feedback from housing counselors and legal service providers has been positive. The system provides homeowners face-to-face meeting with servicers to negotiate sustainable alternatives to foreclosure.

To date, the most significant obstacle is accessing mediation and ensuring that homeowners know how and when to "opt in." We routinely hear that homeowners are intimidated by the process, confused by documents and unsure of their eligibility.

To address the problem, the governor supported, and the General Assembly recently enacted, revisions to the program. The time for a borrower to opt in was lengthened from 15 to 25 days and can be extended if the parties agree.

At the same time, our office has been charged with crafting regulations to clarify the process. Our new regulations seek to ensure that the documents served on homeowners are drafted in plain language.

You are a member of a multistate mortgage investigation. What issues is the group looking into?

The emergence of the "robo-signing" scandal highlighted the issue raised by so many — that while homeowners were pursuing a loan modification and waiting on the phone, the foreclosure machine was methodically marching forward in the next room.

When this surfaced, one of our key concerns was that defective affidavits could undermine the protections for homeowners. …

Governor [Martin] O'Malley, Attorney General [Douglas F.] Gansler and Congressman [Elijah E.] Cummings called for an immediate halt to foreclosures until the problem could be investigated.

Likewise, Maryland courts adopted enhanced protections to ensure the accuracy of the foreclosure process.

At the same time, Iowa Attorney General Tom Miller convened a task force that included all 50 state attorneys general and 37 state banking commissions to conduct a multistate review at the five largest servicers. …

I serve on the group's executive committee, and Maryland has played a lead role throughout. In addition, we joined our fellow state mortgage regulators in launching on-site examinations of the smaller, non-bank servicers that are under our jurisdiction.

While I cannot comment on details, the investigation and related settlement negotiations are ongoing. It is my goal that any settlement remedy the misconduct, improve the process for homeowners going forward and, where appropriate, provide for monetary damages — all in an effort to bring certainty to this fragile housing market while avoiding preventable foreclosures in the future.


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