Michael Urbanski

It seemed to be a sound decision, politically, when it was first reported Feb. 16. The legislation proposed by the Maryland Governor's office would force reluctant lenders to make every effort to modify mortgages before foreclosing on homeowners. Stop foreclosures, protect families. Win/win, right? Wrong say Maryland lenders in a story today in the Washington Examiner.

Lenders fear the new legislation will drive mortgage lenders out of a state that already has a dreadful business reputation. In the end, they claim most would only be delaying the enevitable. The court system, too, opposes the legislation as it would likely create a tidalwave of dispute-resolution conferences with mandatory mediation. The proposal on the table will require lenders to provide the court with documentation proving they made every effort to modify a homeowner's mortgage before moving to foreclosure. Additionally, they would be responsible to provide the homeowner with all information and paperwork necessary to legally contest the foreclosure action and also pay a $100 fee for each foreclosure notice issued.

So what do you think, Active Rain community? Is the Governor making a good faith effort to help homeowners gain some leverage against predatory lenders, or is this a purely political ploy in an election year that is bound to further harm business and the real estate industry in Maryland?

Saturday, Feb. 13, I blogged about the Florida Supreme Court requiring lenders to explain foreclosure sales cancellations. Initially, my thoughts were that the court intended to, first and foremost, address the foreclosure case backlog, with benefits to the market being a secondary consideration. But a new article today on the subject highlights some additional points I had not previously considered and adds additional depth to the story.

Writing for Realty Times, Peter L Mosca raises the point that the court order will address a nefarious tactic by banks to limit their liability on foreclosure real estate developments. Here's the play: Banks were routinely abusing the practice of last minute foreclosure sales cancellations to avoid taking title to underwater condominuims and developments. This tactic not only delayed the bank having to take responsibility of the properties and all the associated costs, but also allowed the banks to delay paying past due assessments and legal fees to condo and home owners associations. Acording to Mosca, ending this underhanded practice by lenders will potentially strengthen the financial health of communities throughout the state of Florida.

The unlikely hero emerging in this tale are lawyers. I know what you're thinking, but hear me out. Association Law Group pioneered "blanket receiverships" last year allowing associations to radically accellerate the process by waiving its right of redemption and its right to a foreclosure sale and requesting the court issue a certificate of title to the bank immediately, thereby making the bank the owner immediately responsible for the association dues.

This new legal strategy forces banks to accept accountability and pay their fair share of assessments while reducing the amount of bad debt incurred by associations.

With the support of the courts, ALG plans to expand its operation from Miami-Dade and Broward counties where it has seen considerable success to other Florida counties in coming months. This is quickly proving to be a win/win for the courts and associations and Florida communities.

In a decision applauded by the Maryland Association of Realtors and other real estate professionals across the state, Maryland's Anne Arundel County announced it is backing away from increasing taxes on certain types of real estate transactions.

The new taxes, collected on debt forgiven by lenders in short sale transactions, began this month. The extra fee, a recordation tax of $3.50 for every $500 on the sales price plus any forgiven debt, was collected on five homes in January for a total of about $4,000. According to the Anne Arundel County Comptroller's Office, this money will be refunded. The policy reversal followed an opinion rendered Wednesday, January 27, by the Maryland attorney general's office that stated the practice isn't supported by state law.

We at USHud.com are pleased that Anne Arundel County is abandoning this short sale tax that would only further burden the local housing market and create confusion for consumers, realtors and lendors during the real estate transaction process.

The Baltimore Sun provided excellent coverage of this breaking story with a series of articles here:

http://www.baltimoresun.com/business/bal-bz.short28jan28,0,5139459.story

For more information about foreclosure real estate in Maryland and nationwide, please visit www.USHud.com.

First time homebuyers, and buyers who haven't owned real estate in the past three years, may be eligible for the Prince George's County Down Payment on Your Dream Program. But hurry. With funds quickly running out, PG County has set a Feb. 19 application deadline.

The Down Payment on Your Dream Program offers eligible buyers assistance with down payments and closing costs for vacant foreclosure homes in specific zip codes. The county program is designed to assist first time homebuyers while energizing a local housing market that has been especially hard hit by the national housing crisis. If you or your client may be interested in purchasing a home in Prince George's County, be sure to look into the details of this program for a considerable savings.

The county has a Web site that outlines specific guidelines for the homebuyer, realtors and lenders as well as the necessary steps families must take in order to qualify: http://www.princegeorgescountymd.gov/DREAM/index.asp

For more information about foreclosure real estate in Maryland and nationwide, please visit www.USHud.com.