Reforms to the Maryland foreclosure process are moving forward in the state's legislature, including a proposal to create a statewide, foreclosed property database.
The Maryland House could vote soon on the online foreclosure database bill after it received another procedural approval Friday. Foreclosure auction buyers, typically lenders, would have to register the property within 30 days of the sale or face potential fines.
Buyers would put in information on the property, including contact info for a property manager. Registration includes a $50 fee ($100 if late) that would go back into a fund for the database.
The bill, H.B. 1373, also allows the state Department of Labor, Licensing and Regulation, who would oversee the database, to penalize non-registrants up to $1,000. Deed-in-lieu transactions would also be included.
The measure comes out of recommendations from the Maryland Foreclosure Task Force, a mishmash of housing advocates and private-sector representatives formed by Gov. Martin O'Malley last summer.
The group reported its findings to legislators in January after 55 meetings, according to Anne Balcer Norton, deputy commissioner of financial regulation in the state Department of Labor. Group members, including Norton, expected only four or five.
"We had some real, honest conversation, which was really helpful in understanding some of the deficiencies in the current system," Norton said. "There's a lot to think about. We've never done this before."
Local jurisdictions often can't find out who should maintain real estate owned properties, Norton said, giving rise to the registry proposal.
Only local and state agencies would have full access to the database, aside from limited contact information available to neighbors on the same block and homeowners associations.
Maryland's legislature is also considering two other bills, H.B. 1374 and S.B. 123. The House measure, which could also come before a floor vote Monday, would provide for more pre-foreclosure mediation, and also make tax-exempt the monetary relief some residents receive from the national mortgage settlement.
The Senate measure, already passed unanimously in that chamber, would require a foreclosure auction buyer to file the court order with a local assessor.
Default notices skyrocketed 157% in Maryland from a year earlier, according to RealtyTrac. One in every 1,481 housing units in the state received a foreclosure filing, which also includes auction sales and new REO properties.