Foreclosure Law Process Reform Bill - SB 216/HB 365 - Financial Regulation
(amending Real Property Article § 7-105 and adding §§ 3-104.1, 7-105.1- 7-105.8)
Effective as to all Foreclosure Filings for Residential Real Property from April 4, 2008
The Foreclosure Process Reform Bill provides important protections for homeowners in the foreclosure process. It affords homeowners more time and notice before and after a foreclosure action is filed right up until the time of sale. It also gives homeowners rights in the process that they did not have before and more time to assert those rights should the lender fail to comply with the law. Because of the emergency nature of this legislation, no foreclosure actions will be ripe for filing for at least 45 days from the law's effective date since lenders will not have had the opportunity (and were not required) to send the requisite 45-day Notice of Intent to Foreclose prior to the effective date of this law.
Before a lender may file for foreclosure, the lender must:
- Wait 90 days from homeowner's default before filing the foreclosure action.
- Default is defined by the mortgage instrument and, in most cases, it is the day after the payment was due.
- For example, if a payment due by the 1st of the month, the homeowner is technically in default on the 2nd, as opposed to after any grace period allowed for late fees.
- Send a uniform Notice of Intent to Foreclose to the homeowner by certified and first class mail 45 days before filing a foreclosure action.
- The Commissioner of Financial Regulation prescribes the uniform Notice of Intent to Foreclose that all lenders must use by regulation. The emergency regulation containing the uniform Notice has been submitted for approval.
- Until the regulation is approved, lenders may comply with the law by sending a 45-day Notice of Intent to Foreclose that contains information required by the statute which includes, but is not limited to:
- The name and phone number of the secured party, the servicer, and an agent who has authority to modify the terms of the loan;
- The amount required to cure the default and reinstate the loan.
- The lenders must also send a copy of the Notice to the Commissioner.
An order to docket or complaint to foreclose must now include:
- Affidavit stating the date of the default and the nature of the default and the date and fact that the Notice of Intent to Foreclose was sent;
- Original or certified copy of the mortgage or deed of trust;
- Statement of the debt remaining supported by affidavit;
- Copy of the debt instrument and an affidavit of ownership;
- Original or certified copy of the assignment of the mortgage if applicable;
- The mortgage lender and originator's license number if applicable;
- Affidavit that defendant is not in the military;
- Copy of the uniform Notice of Intent to Foreclose; and
- A uniform Notice to defendant that the foreclosure action has been filed that complies with statute.
After the foreclosure action has been filed, the lender must:
- Personally serve the owner of the property.
- Alternate service allowed in the case of failed attempts at personal service:
- After at least two good faith attempts at personal service on separate days, the plaintiff may file an affidavit with the Court describing the attempts and effect service by mailing, both certified mail and 1st class mail AND posting on the property.
Before a foreclosure sale can occur, the lender must:
- Wait 45 days from the time the defendant was served with the order to docket or complaint to foreclose, together with all other papers filed with it, including the notice set forth in § 7-105.1(d)(2)(7).
- Publish a Notice of Sale for three successive weeks in a newspaper of general circulation in the county where the action is pending.
- Accept from the homeowner payment of the funds due to cure the default up to one business day before the sale.
- The secured party or the agent must provide, upon request, the amount necessary to cure the default and reinstate the loan and instructions for delivering the payment
For more information or questions, please contact the Office of the Commissioner of Financial Regulation.