Wednesday, November 25, 2009

SB 863 testimony

Testimony to the Senate Finance Committee
SB 863 Credit Regulation-Loans Secured by Residential Real Property-Late or Delinquency Charges and Crediting of Payments
Position: Favorable

March 17, 2010
The Honorable Thomas M. Middleton, Chair
3 East, Miller Senate Building
Annapolis, MD 21401
Cc: Members, Senate Finance Committee

Honorable Chair Middleton and Members of the Senate Finance Committee:

The Maryland Consumer Rights Coalition (MCRC) is a statewide coalition of individuals and organizations that work to ensure fairness and safety in the marketplace. Our members include consumer advocates, practitioners, and low-and-moderate income families throughout Maryland.

MCRC strongly supports SB 863 which ensures that Maryland home-owners would be appropriately credited for mortgage payments that they make. While foreclosures have slowed slightly in Maryland, far too many home-owners are still struggling to maintain their homes. A March 11 report by Real Estate Information Systems (RIS Media) ranked Maryland in the top 10 list of states with the highest foreclosure activity in February 2010. In February 2010, one in every 407 housing units received a foreclosure filing, or 5, 732 filings last month alone.

The General Assembly and the Governor’s office have adopted several measures and promulgated new regulations to stem the tide of foreclosures in Maryland. SB 863 represents another important policy towards assisting Marylanders who are able to do so to retain their homes. Currently, when struggling home-owners make a partial payment on their mortgages, banks may credit the partial payment in an towards interest and penalties so that it never reduces the principal; hold it in a separate account until the rest of the payment arrives; or, unbelievably, refuse to accept it and return it to the home-owner.

SB 863 reverses this policy and replaces it with a common-sense one: rather than helping a consumer to tread water on their mortgage, SB 863 allows a consumer to get ahead by paying down their principal. This bill will assist struggling home-owners who are doing their best to continue to pay their mortgage in these hard economic times.

MCRC strongly supports SB 863 and urges the committee to issue a favorable report.

Respectfully submitted,

Marceline White
Executive Director, MCRC


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