Lawmakers take aim at practice of `flipping'

High-interest lenders also being targeted

February 26, 2000|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

Two House of Delegates committees will hold a joint hearing Monday on a package of bills aimed at curbing property "flipping."

The hearing by House Economic Matters Committee and Commerce and Government Matters Committee is scheduled for 3 p.m. in the Legislative Services building in Annapolis.

The committees are to hear testimony on measures that would require the licensing of all real estate appraisers, would require city real estate transactions to be entered on the Web site of the State Department of Assessments and Taxation more quickly and would limit the fees and points charged by mortgage brokers and lenders. The latter bill also proposes restrictions on high-interest mortgages.

The legislation comes in response to an epidemic of flipping, in which more than 2,000 Baltimore houses have been bought and quickly resold in the last four years for price increases of 100 percent or more. In most cases, little if any work was done on the dilapidated houses and both buyers and lenders were defrauded.

Last Wednesday, the Commerce and Government Matters Committee held a hearing on another measure that would broaden the powers of the commissioner of financial regulation -- formerly called the banking commissioner -- to police lenders and brokers, as well as other firms and individuals the agency licenses.

That bill would allow the commissioner to quickly obtain cease-and-desist orders when regulators suspect illegal activity, would give her greater authority to police unlicensed companies and individuals, and would permit her to impose civil penalties for violations.

Del. Maggie L. McIntosh, a Baltimore Democrat who sponsored the bill, said the measure would also give regulators broader authority in dealing with check-cashing and payday lending companies.

The bill has the support of the Maryland Center for Community Development; the Mid-Atlantic Financial Services Association Inc., which represents 27 lending institutions; and Household International Corp., a major lender.

The Maryland Bankers Association, while expressing support for the bill, asked that licensed commercial banks, their affiliates and subsidiaries be excluded, arguing that they are already adequately covered by existing law.

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