The legislature has passed by wide, bipartisan margins the three key measures recommended by Governor O’Malley’s foreclosure task force – establishing early mediation, a statewide foreclosed property database and a tax credit for families that buy a foreclosed property as their principal home.
Taken together, the measures reflect the Maryland Foreclosure Task Force’s dual strategy for coping with what it called the “harsh reality” that the crisis will continue for some time – they give beleaguered homeowners additional time to prevent losing their home and they give state and local governments new tools to help neighborhoods rebound from the blight of vacant and foreclosed properties.
The measures also build upon the sweeping reforms enacted under Governor O’Malley’s leadership since 2007 in response to the most severe national housing crisis since the Great Depression. Maryland foreclosures peaked during the fourth quarter of 2009 and have been declining ever since. But Secretary Skinner warns that the rate may surge again as lenders adjust to regulatory reform.
Early mediation gives homeowners who are in default on their mortgage the option to seek mediation before their homes enter foreclosure. The intent is to help homeowners and lenders find sustainable alternatives to foreclosure by bringing them to the negotiating table earlier in the process.
Lawmakers also set up a statewide central foreclosed property registry that will enable local governments to determine who is responsible for upkeep of a vacant property during the sometimes lengthy limbo period after a foreclosure auction. The measure helps communities – particularly those hard-hit by multiple foreclosures – to stabilize overall property values.
The Neighborhood Conservation tax credit gives potential homeowners an incentive to purchase foreclosed properties in targeted communities, helping to get those properties back on the tax rolls faster. Governor O’Malley signed that measure on April 10.