Is Maryland’s Expedited Foreclosure Process truly a “Fast Track” process?

By Hugh Green

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November 30, 2017 – In a further attempt to address vacant and abandoned properties, the Maryland legislature enacted Section 7-105.14 (SB 1033 HB 702) as an “expedited” foreclosure process. Under the Act, the secured party may petition the Circuit Court seeking an order to immediately commence a foreclosure. If granted, the secured party is relieved of sending certain pre-foreclosure notices and the opt-in mediation program.

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Under the Act, the criteria the Court may consider in determining whether a property is vacant and abandoned is as follows:

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·         Utilities have been disconnected.
·         Windows and doors have been boarded up or windows broken and unrepaired.
·         Entry doors broken, unhinged or continuously unlocked.
·         Accumulation of trash, debris or hazardous materials.
·         No furnishing, window treatments or personal items present.
·         Property subject to vandalism, loitering or criminal conduct or to include physical destruction or deterioration.
·         Written statement from the homeowner of intent of all owners to abandon the property.
·         A determination of vacancy upon a property inspection by the secured party.
·         Two or more citations for health and safety violations by the city or county.
·         The property has been condemned.
·         Other reasonable indicia of abandonment exists.

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If the petition is granted, the Foreclosure Order to Docket (first legal) could then be filed immediately along with a notice advising the owner or occupant of their ability to challenge the finding within 20 days of service.

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While the Act, exempts the secured party from sending the pre-foreclosure notice of intent (“NO”), most lenders currently already have sent the NOI, so that it expires prior to or concurrent with the federal 120 days prohibition against foreclosure.

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Since, Section 7-105.14 requires a separate legal proceeding, proceeding under the current process would likely be faster than waiting for a court ruling on vacancy and abandonment.  Likewise with respect to foreclosure mediation, Maryland’s mediation is “opt-in” by the borrower.  In a standard foreclosure, when the property is truly vacant and abandoned, the borrower rarely seek mediation.   Moreover, in order to be eligible for foreclosure mediation, the property must be owner-occupied.  Therefore, it is unlikely that any time saving would be realized on this basis.

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In addition, petitioning the Circuit court for a determination of vacancy and abandonment, would only increase the cost to secured parties and likely create additional delays based on the separate court proceeding.   Ultimately this new “fast-track” foreclosure legislation is unlikely to result in any overall time savings and would only increase costs if utilized.

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A copy of the legislation is available here: http://mgaleg.maryland.gov/2017RS/Chapters_noln/CH_617_sb1033t.pdf

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Should you have any questions regarding the above please feel free to contact Orlans PC Attorney Hugh Green at hgreen@orlans.com or direct at 703-554- 6475.