Foreclosure arbitration could be on O'Malley agenda
Governor weighs legislation to help homeowners keep houses
Gov. Martin O'Malley might try to require lenders to submit to arbitration to help borrowers avoid having their homes enter foreclosure.
Secretary Raymond Skinner of Maryland's Department of Housing and Community Development told the Legislative Black Caucus on Thursday that O'Malley (D) might include that change as part of a legislative package he will present after the General Assembly convenes in January.
Prince George's County and Baltimore city are home to 26 percent of the state's population, Skinner told the caucus, but the two jurisdictions account for 42 percent of the state's foreclosures.
In 2007, foreclosures cost Prince George's County about $963.5 million, Skinner told lawmakers.
That estimate includes, but is not limited to, lost wages, property taxes and the decline in home values, said Rosa Cruz, a spokeswoman for the state housing department.
Nearby, Pennsylvania is considering mandatory arbitration, after Philadelphia's implementation of a "conciliation" program designed to make lenders come to the table with borrowers to save their homes or equity.
In May, Minnesota Gov. Tim Pawlenty (R) vetoed a bill that would have increased foreclosure fees to pay for a program that promoted mediation.
Connecticut, Florida, Maine, Indiana and Nevada are among states that have implemented measures mandating mediation, which, unlike arbitration, does not leave the decision in the hands of a third party but employs a mediator to help two parties arrive at an agreement.
Rising court costs and strained state budgets have officials in many jurisdictions considering promoting or requiring alternative dispute resolution.