Maryland consumer group says mortgage relief may bypass poorer homeowners -- Gazette.Net


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A Maryland consumer advocacy group is calling for more neighborhood-specific data on where banks distribute billions of dollars in mortgage relief under a national settlement that's meant to make up for the predatory lending and other mortgage abuses that contributed to a national wave of foreclosures.

To help ensure fairness, Joseph A. Smith, the national settlement monitor, should require banks to provide ZIP code-level data on the relief they have offered to date and relief they offer in the future, the Maryland Consumer Rights Coalition told Smith in a letter last week.

AARP Maryland and 11 civic, charity, community and social advocacy groups also signed the letter.

"Housing counselors and policy specialists in Maryland have raised concerns that the principal-reduction loan modifications [that] servicers are offering may be concentrated in wealthier ZIP codes — perhaps because writing down higher-dollar mortgages enables servicers to discharge their mortgage credit obligations under the settlement relatively quickly and easily," Executive Director Marceline White wrote in the letter to Smith.

"At the same time, servicers appear to be failing to provide principal reduction loan modifications in low- and moderate-income neighborhoods," which would undermine the goal of the settlement, White wrote.

Late last month, some national groups also asked the settlement monitor to require demographic and geographic data to show where the five large banks that must offer relief have distributed it.

Maryland's share of the settlement was more than $950 million.

According to a report in late August, about 2,800 Maryland households had gotten relief from the settlement.

The next report is due Wednesday.

In the first half of 2012, foreclosure filings in Maryland's largest metropolitan areas were well below the national average, according to RealtyTrac of Irvine, Calif.

mhyslop@gazette.net