Vexing problems caused by the nation’s foreclosure crisis continue to ripple through Maryland, calling for thoughtful, measured responses to protect the integrity of the process and, most of all, to protect homeowners from losing their houses by fraudulent or illegal means.
In the interest of full disclosure, we should note that this newspaper and many others throughout the country derive significant revenue by publishing various forms of legal advertising, including foreclosure notices. These notices are required by law to help assure that the general public and affected property owners, neighbors and potential purchasers are informed of a pending foreclosure sale.
That said, the true bottom line for us and all Marylanders should be an open, fair and equitable process that allows an unfortunate but necessary part of the legal system to proceed while providing for the rights of property owners.
In that light, we believe that the steps taken so far by Maryland public agencies have been appropriate and helpful.
We applaud last week’s action by the Court of Appeals to give Maryland’s circuit courts more tools to employ in the tedious but vital process of spotting irregularities in the mortgage foreclosure process.
Now circuit judges can appoint special masters to examine foreclosure documents. If this review uncovers a problem with a lender’s paperwork, the lender has 30 days to show — at its own expense — why the foreclosure should not be dismissed. Also, judges may summon lawyers and notaries public into court when the authenticity of signatures and documents is in question.
While this heightened scrutiny may slow the process, it is well worth the time and effort to make sure everything is correct and in order.
The Court of Appeals’ action was necessary because of revelations that attorneys in at least two Maryland law firms had not signed affidavits bearing their names in foreclosure proceedings. Since that disclosure, other attorneys have been filing corrective affidavits to correct similar problems.
This extra attention, along with the availability of foreclosure mediation made possible through a state law that took effect this year, seems an appropriate level of response.
At the moment, we do not see the need for a temporary moratorium on foreclosures in Maryland. This seems like an over-reaction now, but it may be a step that needs to be taken later if conditions warrant.
There are additional issues that must be addressed nationally. Banks must stop insisting on the speediest possible foreclosures. Lawyers must actually read what they are signing. Lenders must be available to explain terms, conditions and options to struggling homeowners. And with mortgages being bought and sold so many times, there must be clear and convincing proof of every aspect of ownership before a foreclosure occurs.
In Maryland, there are at least two other steps that should be taken:
Those who have knowingly attested to the authenticity of false signatures must suffer the professional consequences for their actions. This has already begun with notaries public. The Maryland Secretary of State’s office, which regulates this profession, has revoked the commissions of six notaries implicated in the signature scandal so far and is investigating others.
Lawyers, too, must be subject to swift and appropriate penalties by the Attorney Grievance Commission. Nothing less will restore public confidence in the foreclosure process.