Annapolis, MD – The landmark $25 billion settlement between federal officials, 49 state attorneys general and five of the nation’s largest mortgage lenders is expected to bring nearly $1 billion to Maryland, Governor O’Malley announced. The settlement is in response to a nationwide epidemic of foreclosure abuses and unacceptable mortgage servicing practices, including so-called “robo-signing.” See details of the settlement.
The agreement still must be filed in a federal court and be approved by a judge. It may take several months before resources become available to Maryland. Details on what the settlement will mean to Maryland homeowners can be found on DHCD’s MD HOPE website.
“There is no more powerful place in our state than a family’s home, and there is nothing more important for a family’s security and future than a job. Today’s announcement of a nearly $1 billion settlement with the nation’s five largest mortgage servicers is welcome news to the thousands of Marylanders who have faced or are facing the risk of losing their home,” the governor said. Read the governor’s full statement.
The deal aims to help troubled borrowers by reducing the amount they owe on their mortgages, lowering their interest rates and paying restitution to homeowners who suffered mortgage-related abuses, according to an announcement by U.S. Attorney General Eric Holder. It will force lenders to revamp how they interact with troubled homeowners and bar them from trying to foreclose on borrowers while simultaneously negotiating mortgage modifications.
Meanwhile, Maryland homeowners facing foreclosure should contact the state’s HOPE Counseling Network for assistance, the governor said.
Under Governor O’Malley’s leadership, the state legislature passed one of the most sweeping reform packages in the country, giving distressed homeowners more time to work out alternatives to foreclosure; making the process more transparent; and enacting tough new laws against some of the more egregious predatory lending practices. Maryland established the free MD HOPE Counseling network so that homeowners could get the information they need to make informed decisions about their future and Maryland was one of the first states to make mediation an option, giving lenders an incentive to sit down and negotiate.
Those measures have had a significant impact. Just a few years ago, Maryland had one of the highest foreclosure rates in the country. Today, the state has one of the lowest. Maryland’s MDHOPE Housing Counseling Network has aided more than 70,000 homeowners at risk of foreclosure, achieving positive results in 92 percent of completed cases. And the Department of Housing and Community Development has attended hundreds of workshops and forums throughout the state, reaching well over 500,000 people with foreclosure prevention brochures and information kits.