Housing Advocates: Maryland Law Fails to Stop Foreclosures

A 2010 Maryland law gave homeowners in foreclosure the right to mediation, a face-to-face meeting meant to stop the runaround many homeowners faced in dealing with lenders. But three years later, legal advocates say mediation has done little to help many troubled homeowners, reports the Baltimore Sun.

"They're more of a status conference than an actual negotiation or substantive discussion about ways in which a home can be saved," said Owen Jarvis, a staff attorney for the St. Ambrose Housing Aid Center.

Legislators intended for the law to push banks to consider alternatives to foreclosure. Before foreclosing on a home, lenders are required to sign an affidavit vouching that they have looked at other options and explain why they aren't possible, the newspaper story said.

Maryland's foreclosure rate was the third-highest in the nation in November, with nearly 4,000 foreclosure filings, the Sun reports. That number is up 42 percent since this time last year and has risen year-over-year for the last 17 months, a reflection of a backlog of old loans now being processed.

Since the mediation law went into effect, about 24 percent of eligible homeowners have opted to participate. In recent months, requests for mediation soared, to a record 519 in October, compared to between 100 and 150 a month after the law first passed, according to the Sun story.