Compulsory Mediation Bill Of Maryland May Not Solve Foreclosure Problem

Compared to other states Maryland is weathering the recession storm better than the other states

. But the same cannot be said about the problem of foreclosures. The number has increased in the last quarter of 2009 to about 17,000. By the term foreclosure reference is made to all the stages of the process. The number is 13.4% more than the 3rd quarter and 70% higher than the previous year, 4th quarter. Prince Georges County has been the worst hit. Baltimore City is a close second. The real estate market of the state has been crippled and prices have tumbled. This has led to increase in economic pain and the apprehension is that this could continue for many years.

The Governor of Maryland, Martin OMalley has been focusing on the foreclosure problem during his tenure. He is forcing through a bill that has lengthened what was at one time the quickest foreclosure procedure in the country. Now he has again picked up the cudgels and is initiating a bill that would make it compulsory for mediation sessions to be held between lenders and or servicers and the borrowers. The consumer advocates and the banking industry of the state are supporting it. It deserves to be passed by the General Assembly. In many matters it would improve foreclosure related matters. But it should be also understood that the legislation would not resolve the foreclosure problem. It seems that there is nothing the government can do to solve the problem totally.

Although the bill has been named the mandatory mediation bill mediation is not its main theme. The key is the forcing of lenders or servicers to file an affidavit prior to filing foreclosure showing that they have tried out all other alternatives first. Many programmes initiated by the Federal Government and the State could assist the modification of loans. Other alternatives also could blunt the bite of foreclosures. But unfortunately many of the borrowers are not aware of these options. The lenders and servicers do not make any effort to educate or enlighten them.

Mediation would be important to decide if the borrower is eligible for it. Too many of the harassed borrowers fail to reach even that point. Generally it is being propagated that the lenders do not benefit from foreclosures and they too are eager for negotiation. But reality speaks otherwise. It is an unpractical romanticized notion.

by: Karen

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