Governor O'Malley Signs Emergency Legislation to Protect Homeownership.
If you didn't catch the above article from the MAR (Maryland Association of Realtors) Take a minute to read it. The new legislation was signed to take immediate effect April 3, 2008.
I must admit that I am a little torn as to the overall effectiveness of this new legislation. I can and do understand that the Legislature wants to do something to help homeowners in crisis, but are these 3 laws the right ones?
SB 216/HB 365 - Foreclosure Process- Basically this law extends the time before lending institutions can start the process and the time before actual foreclosure. Maybe I am misinterpreting but seems to me that the time extension and other necessary filings will increase the total expense of the foreclosure-not help eliminate the foreclosure.
I talk with bank reps regularly and they tell me that it is a rare occurence that foreclosure proceedings are stopped due to the homeowner bringing payments and fees current. It could allow the homeowner a little more time to sell the property before the foreclosure sale, but does this truly help the homeowner to keep a roof over their head? This seems to add more time to allow the "foreclosure specialist" to "help" the homeowner, which I will expand on in a moment.
SB 217/HB 360 - Mortgage Fraud Protection-The key wording here is "knowingly" engages in any activity or filing to produce a fraudulent loan. This seems to be a pretty broad law aimed at anyone involved in the mortgage process. What about the homeowner that doesn't know he is dealing with an unscrupulous loan person-is that homeowner still going to lose his home even though he had no knowledge or direct involvement in the shady dealings-he was just trusting his loan officer? Does the statement:
Establishes certain defenses against forfeiture for innocent owners, tenants, and property used as a principal residence.mean that the homeowner will keep his home while the offending parties are prosecuted or since the homeowner signed all the paperwork, they are now a party to the fraudulent loan?
Please to all of the loan officers that are honest, hard working, and good at their jobs-I certainly mean no offense, but there are, in every business, those that feel they need to undermine the process to get the job done-no matter what the cost.
SB 218/HB 361 - Prohibition on Certain Foreclosure Transactions-Working on the investor side of this business, I get a lot of calls and emails concerning foreclosures, especially pre-foreclosure homes. I will not add an investor to my list unless I have talked with them face to face or at minimum on the phone. Usually within the first 5 minutes of a conversation, I can sum up the intent of the person.
Of course, every investor is in business, thus they should make a profit-but how much and to what end will they go? If I cannot get a good feeling about the person and since my license and reputation are on the line, I will walk away. Homeowners that are in trouble with their mortgage are nervous, scared and not thinking objectively-thus they might agree to many things not in their best interest.
My point being that some of the parts of this new law are very valid and will help the homeowner protect what is theirs-not from the lender but the so-called foreclosure specialist that is preying on the bad situation of the homeowner.
There are many investors that truly care not only about the profit but about the homeowner as a person. (We are all Human Beings first, aren't we?) I have worked with investors that have helped homeowners retain a new place to live, or helped them move, or paid for a moving company. Aren't these the type of people that are truly helping the homeowner AND the economy?
Parts of this law will make it tougher for these investors to do what they have done in the past, but I know that because of their moral fiber, they will find the RIGHT methods to get the job done within the guidelines set forth. I know that they will not negate the needs of the troubled homeowner in doing so.
Summing up-The Real Estate Market is correcting from the huge surge of the previous market. Is this not normal? When the stock market enjoys a long increase does it not go through a correction period that still ends higher than before the increase.
Each of us needs to ride this wave and do what is legally and morally necessary to stay balanced. Yes times are tough right now-How many Realtors left the business in 2007?-but the market will turn and level off. Those of us who are in a position to aid those that are more troubled have an obligation to help. We cannot depend on the Government to enact legislation every time things get tough. If this is our expectation, we take one step closer to a socialist society in America.
I have not yet made concrete decisions on the effectiveness of this new legislation, but I would love to hear your opinions.
Stephen Luckett
LuckNet Real Estate Group
443-912-4866 cell
Baltimore County Real Estate, Nottingham Real Estate, Perry Hall Real Estate, White Marsh Real Estate, Parkville Real Estate, Dundalk Real Estate, Sparrows Point Real Estate, Miller's Island Real Estate, Middle River Real Estate, Essex Real Estate, Rosedale Real Estate, Baltimore City Real Estate, Harford County Real Estate, Fallston Real Estate, Bel Air Real Estate, Anne Arundel County Real Estate, Real Estate Investor, Real Estate Settlement
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Here is my understanding of the Foreclosure process. I believe that it brings Maryland up to the national standard for time periods. Since most banks are nationally chartered it was not a big issue from the traditional lending side. However, your neighborhood "equity stripping experts" were using the quick Maryland time frames to foreclose on private financed deals.
Many investors have helped save folks from foreclosure, but it was the bad apples spoiling the bunch. In the public policy arena, it is difficult to draw the line between good and evil when profits are involved.