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 roperty (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.

Related posts:

1. Missouri, a non-judicial foreclosure state.
2. Why Not Just Stop Paying Your Second Mortgage In California?
3. Can My New Lender Charge Me A Late Fee If I Paid The Old Lender On Time?