Borrowers

With the mortgage-sparked credit crisis expected to worsen over the next year, Maryland lawmakers are exploring legislation aimed at protecting consumers and forcing lenders to examine a borrower's qualifications more carefully before offering loans. "We need to prevent people from getting into loans that set them up for failure," Maryland's secretary of labor, licensing and regulation, Thomas E. Perez, said yesterday at a hearing in Annapolis. "Foreclosures not only tear families apart, but they undermine communities."

For six years, Timothy and Dawn Powers of Pasadena had no complaint with their mortgage lender. They mailed their monthly payments on time, the lender took care of property taxes and insurance premiums on time, and the Powerses never gave the details a second thought.But in 1993, they refinanced the loan on their rancher through another lender. The new mortgage company sold the loan to yet another company, thousands of miles away. That's when the problems started."Since then, we've had nothing but frustration," said Ms. Powers, 32. The company misplaced the Powerses' property tax bills, paid tax assessments twice and didn't pay ground rent fees.

Companies that help borrowers look for mistakes in adjustable-rate mortgages are doing a brisk business these days as rates rise and borrowers worry more and more about paying too much on their loans.David Ginsburg, president of Gaithersburg-based Loantech, says that business was up 40 percent in 1994 and that he expects another large increase this year. Mortgage Monitor Services of Stamford, Conn., has seen a similar increase. And Adjustment Rate Analysis Inc. in Glyndon, which opened in September, has amassed dozens of clients so far.Business is expected to get even better this year and next, the companies say, because of the growing number of ARMs taken out last year.

A large subprime lender that borrowers claimed engaged in predatory lending tactics entered into a settlement last week with its borrowers and a large community-rights group. Household International Inc., a subsidiary of HSBC Holding based in Prospect Park, Ill., announced a proposed settlement with a series of borrowers and the Association of Community Organizations for Reform Now (ACORN), a community activist group that filed the suit on behalf of the borrowers in October of last year.

Much of the wealth of millions of baby boomers is tied up in their houses — a sure sign we're going to see a growing demand for reverse mortgages. These mortgages allow older homeowners to drain the equity in their house without having to sell it or make monthly payments. For now, though, these complex loans make up only a tiny percentage of housing loans — and that's a good thing. It gives regulators, the industry and consumer advocates time to bolster borrower protections and education before widespread problems occur.

For filmgoers who grew up loving Mary Norton's book series "The Borrowers," Peter Hewitt's filmed adaptation will prove a relief: With its fanciful production design, cunning effects and charming characters, "The Borrowers" amply lives up to its progenitor.For those filmgoers' children, many of whom will be exposed to these mysterious characters for the first time, "The Borrowers" will provide sweet, wholesome entertainment that, while low on the supercharged action of most kids' films these days, will captivate their imaginations.

Marylanders who got home loans from Ameriquest Mortgage Co. can begin to claim their share of a $325 million settlement reached with the subprime lender that was accused of preying upon borrowers nationwide with deceptive practices. Douglas F. Gansler, Maryland's attorney general, announced yesterday that his agency and the Maryland commissioner of financial regulation sent letters and claim forms this week to 12,340 Ameriquest customers in Maryland who are eligible for $7.8 million in restitution.

Despite nationally recognized efforts to help residents avoid foreclosure, the state of Maryland has been slow to make mortgage payments more affordable for the struggling homeowners whose loans it owns. Gov. Martin O'Malley and his administration have pressed national loan servicers in recent years to work with homeowners rather than foreclose. But it wasn't until four months ago that the state — which lends money to first-time homebuyers — designed a program to lower monthly mortgage payments to an amount that its borrowers in trouble could afford, The Baltimore Sun has learned.

One in eight Maryland borrowers were behind on their mortgages this spring, a new report shows, a record caused by job losses and foreclosures feeding on each other in a vicious cycle. That adds up to about 132,000 homeowners who were at least 30 days late, according to a survey released Thursday by the Mortgage Bankers Association. That's up nearly 60 percent from a year ago and includes people whose lenders were trying to foreclose as of June. The country fell into recession after homeowners with risky "subprime" loans began defaulting in large numbers two years ago, sending financial institutions into a tailspin.

For two weeks, Tom Gallagher didn't have much success reaching his son and daughter who are working at a camp deep in the Adirondacks. Cell phone reception is weak. Internet access is limited. Still, the Mitchellville father sent several e-mails reminding them to consolidate federal student loans before higher interest rates kick in Friday. "I've been pushing both of them to try to do that," said Gallagher, who did the same with $71,000 in parent loans last month. To his relief, his daughter e-mailed this week to say they're taking his advice.