Changes to Maryland Foreclosure Law: Steak or Sizzle?

19 Apr Changes to Maryland Foreclosure Law: Steak or Sizzle?

Maryland legislators touted changes to the Maryland foreclosure law adopted in the most recent legislative session, HB 365, as helping to protect homeowners against foreclosure. The Washington Post reported the adoption of this bill would provide “immediate assistance by extending the timetable of a foreclosure from 15 days to 150.” Sounds pretty good. But is the change as big as it sounds? Not even close. Lots of sizzle, and, with one notable exception, not much steak.

The bill provides that an action to foreclose may not be filed ntil 90 days after a default or 45 days after a notice of intent to foreclose is sent. Since few, if any, foreclosure actions are currently docketed until 90 days after default anyway (if your mortgage payment is due on the first [and late on the 16th], a default actually occurs if the lender doesn’t receive your payment by the second), I’m not sure what difference this will actually make.

Another small difference is found in § 7-105.1, which requires a Notice of Intent to Foreclose to be sent by certified and first class mail 45 days before the action is docketed. Depending on who sends his notice out (local counsel or the lender), it might extend the re-foreclosure period, although speed being essential in such matters, I suspect that the lender will send it as part of its regular lead up to sending the case to its lawyer for foreclosure, and the practical effect will be minimal.

What is really big in this bill are the provisions of § 7-105.1(E), which now appear to require actual personal service of the Order to Docket or Complaint to Foreclose on residential property (or service by mail and posting if two good-faith attempts to personally serve the papers fail.) The foreclosure cannot occur until 5 days after service. Until adoption of this provision, Maryland was one of the very few states in the country that allowed foreclosure without any requirement that the homeowner actually receive notice of the foreclosure. Publication requirements are still the same, three times over the 15 days before the foreclosure. Interestingly, the right to cure apparently expires one business day before the sale (§ (H)(1)). (This restriction would appear to have no impact on someone filing for Chapter 13 relief to stop the foreclosure.)

Note that the provisions of this bill DO NOT APPLY TO ANY FORECLOSURE ACTION BROUGHT BEFORE APRIL 3, 2008. This means that if the foreclosure was docketed before this date, the provisions of the new law don’t apply. Most foreclosures actions docketed on April 2 won’t actually go to foreclosure until mid to late May, so there are a lot of folks who won’t be protected by the changes.

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Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
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