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O'Malley meets with loan servicers

Gov. Martin O'Malley and mortgage industry representatives met yesterday to create a process for loan "triage" in Maryland by which homeowners at risk of foreclosure could be connected with lenders willing to refinance.

The mortgage summit came a week after O'Malley railed against loan servicers for shoddy customer service as a rising number of homeowners are defaulting on loans.

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Eight loan servicers attended the event, including Baltimore-based CitiFinancial and Ocwen Loan Servicing. State regulators targeted Ocwen for an examination after receiving several consumer complaints. More than two dozen servicers were invited.

State and corporate officials did not finalize an agreement in the two-hour, closed-door meeting in Annapolis, but they pledged to meet again in the coming weeks.

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Other states have met with industry officials about complaints that loan servicers are unresponsive to homeowners seeking assistance. California, for instance, reached an agreement late last year with four servicers to help homeowners keep their homes.

"They acknowledged that there are some issues, and that they need to ramp up their staffing and processes," Maryland Housing and Community Development Secretary Raymond A. Skinner said of the loan servicers.

Skinner said the companies agreed to provide information to nonprofit housing counselors, who are often the first contact for distressed homeowners, so that they can better direct borrowers to lenders. He also said that loan servicers plan to furnish phone numbers that housing counselors can call when they can't get through to a customer service representative.

Regulators say that homeowners trying to reach loan servicers in recent months have met with busy signals, long waits on hold and a lack of assistance once they do get in touch with company representatives.

"We aren't going to be able to stop this foreclosure crisis," O'Malley said. "But what we believe we can do is reach a lot more people. And if you save one person from losing their home, then it's worth the effort."

Josh Denney of the Mortgage Bankers Association, who attended the meeting, noted that Maryland has fared better than most states in terms of the number of foreclosures, although he said he understood that state officials want to do all they can to ensure the problem doesn't worsen.

Some data put the number of foreclosures in Maryland at more than 9,700 in the last three months of last year, a 40 percent jump from the previous quarter.

laura.smitherman@baltsun.com


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