by Dan Krell © 2010
The 2010 regular session of the Maryland Legislature passed measures to assist and clarify issues regarding foreclosure. In addition to legislation that adds procedures to protect renters who live in homes in foreclosure, and clarifying that an individual must exercise the “power of sale” stated in a deed of trust – the requirement to provide a home owner the opportunity for mediation prior to a foreclosure sale will take effect July 1st, 2010.
Maryland H.B. 472: “Residential Property Foreclosure Procedures – Foreclosure Mediation” was the outcome of Governor O’Malley’s workgroup to explore the option of implementing a foreclosure mediation program to assist home owners stay in their homes while attempting to reduce the number of Maryland foreclosures. The bill was passed and recently signed into law.
The new law establishes additional rules for foreclosure filings as well as requirements to exhaust efforts assisting the home owner to retain their home, including mediation. As of July 1st, the new law requires any lender filing a notice of intent to foreclose (NOI), to provide the home owner an opportunity for loss mitigation (including mediation), as well as including additional foreclosure information.
To comply with the law, the NOI must either be accompanied by a preliminary or final affidavit for loss mitigation. The lender’s NOI will now include a statement recommending housing counseling; information on governmental foreclosure assistance; and an explanation of the Maryland foreclosure process (including time lines). Additionally, the NOI will be accompanied by a loss mitigation application; instructions for completing the loss mitigation application; a telephone number to call to confirm receipt of the application; a description of the eligibility requirements for the lender’s loss mitigation programs that may be applicable; and a preprinted envelope indicating the address of the person responsible for conducting loss mitigation on the lender’s behalf. Fees that are collected for the NOI will assist in funding mediation, housing counseling, and other foreclosure resources.
If the home in foreclosure is owner occupied, then the home owner can file a petition for mediation before the foreclosure sale date is scheduled. The request for mediation must be made within fifteen days of service or mailing of the final loss mitigation affidavit. The mediation will be conducted by the Office of Administrative Hearings (OAH), which has sixty days to schedule the mediation; the OAH has authority to extend mediation by no more than thirty days if needed. The OAH must report the outcome of the mediation either when the sixty days expires or after the expiration of any extension period that is granted. If no agreement is reached during mediation, the lender may schedule a sale date (which can be as early as fifteen days after the mediation hearing).
If mediation is requested by the home owner, the lender must be engaged in the process. The lender’s representatives who are present in mediation must have the authority to settle the matter or be able to readily contact someone who can. The home owner, when entering into mediation, may be accompanied by a housing counselor and/or an attorney.
Information regarding the new Maryland foreclosure mediation law will be available to home owners through approved housing counselors as well as the MDHope Hotline (1-877-462-7555). Additional assistance and additional foreclosure resources are available from the Maryland Office of the Commissioner of Financial Regulation (www.dllr.state.md.us/finance/consumers/mortforeinfo.shtml).
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 10, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell