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Groups seek foreclosure moratorium

Civil rights groups are pressing lawmakers in Annapolis to impose a six-month moratorium on home foreclosures, as the number of cases has surged in Maryland. But a banker's group and the O'Malley administration contend that there's already plenty of help available for struggling homeowners, and that the housing market can't fully rebound until delinquent mortgages are dealt with.

Maryland had the third-highest foreclosure rate in the country last month, according to RealtyTrac, a firm that monitors such activity. Now leaders of the Maryland state convention of the NAACP and CASA de Maryland have made the moratorium one of their top legislative priorities this year.

Members of the two groups gathered in Annapolis Monday evening to lobby legislators and rally for foreclosure reform, along with pleas to raise the minimum wage, boost funding for the state's historically black colleges and end police involvement in detaining undocumented immigrants.

Legislation that would temporarily halt foreclosures and impose new requirements on them is scheduled to be heard by a House committee on Thursday and by a Senate committee March 5.

"We're finding that a lot of folks are 'under water,'" said Bob Ross, an NAACP spokesman, as they owe more on their mortgages than their home is worth.

Maryland imposed a six-month moratorium two years ago as lawmakers enacted broad reforms in the state's foreclosure process. Though it helped, Ross said, "it doesn't work for everybody, and we need to do it again to ... get a procedure in place that's fair and equitable for everybody."

The NAACP spokesman said homeowners' complaints include lost paperwork filed with lenders to renegotiate terms of their mortgages, and moves by lenders to foreclose on homes even as they talk with owners about modifying the loans.

"Many African-American and Latino homeowners are in danger of being homeless," said Susana Flores, spokeswoman for CASA, the state's largest immigrant rights group.

The Maryland Bankers Association opposes a moratorium. Kathleen Murphy, the group's president and CEO, said that previous reforms have slowed foreclosures, more than doubling the time it takes for a mortgage lender to take action against a seriously delinquent borrower from 217 days before the recession to 575 days now. That's one of the longest processes in any state in the country, she said.

"Further delaying the process is not the way to go," Murphy said, noting that many of the foreclosures now inflating Maryland's rate are cases that were held up by the previous reform effort. She argued that home vacancies and stalled foreclosures are dragging property values down, and that homeowners still current on their loans will be helped by not hindering the process anymore.

"Really it's a rising tide lifts all boats," she said. "As we move through the final inventory of foreclosures, ultimately it will help property values for all homeowners."

The state Department of Housing and Community Development released a statement indicating O'Malley administration officials do not support a foreclosure moratorium either, even though it said they "understand the frustration" felt by the NAACP and others and share homeowners' concerns.

More than 95,000 homeowners have sought help with their mortgages through a state hotline, according to the state housing agency, and the state ranks fifth in the number of loan modifications made through the federal government. State homeowners collectively received more than $1.3 billion in relief, the statement noted, as a result of a nationwide legal settlement with issuers of subprime loans.

The recent surge in foreclosures is the product of a "large backlog of severely delinquent loans" stalled since 2011, according to state housing officials. But they also suggested the uptick indicates the state's housing market is actually getting stronger.

Finally, the state housing statement said, without elaborating, that officials "have been advised that there are legal concerns about the constitutionality of the moratorium legislation."

tim.wheeler@baltsun.com

Copyright © 2014, The Baltimore Sun
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