Changes to state laws designed to protect struggling homeowners

A state task force in Maryland is recommending the government enforce best practices and introduce new laws to help struggling homeowners and communities avoid foreclosure.

Included in the task force's recommendations to a state House committee were voluntary mediation before a foreclosure case is filed, and tax incentives for homeowners who purchase a distressed property on the market among others. Some of the recommendations would require the legislature to create new laws, while others would just need an authority to launch a program or effort, the Baltimore Sun reported.

The Maryland Bankers Association was part of the task force developing best practices to help the local housing market, and its members are in full cooperation with the recommended changes. In addition, Maryland's deputy commissioner of financial regulation said state bodies will be overseeing the practices of mortgage lenders to ensure best practices in place, the source reported.

Another task force was created last year in Hawaii to help draft new mortgage legislation to aid struggling homeowners. Since the passing of the legislation, the foreclosure rate in the state has dropped 53 percent, as more homeowners are able to modify their home loans and stay in their homes. The goal of the new legislation is to put more restrictions on mortgage lenders to avoid deceptive practices that led to the high foreclosure rate prior, The Associated Press reported.

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