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Maryland Foreclosure Laws and Timelines - Revisions 2008

by The John Collins Real Estate Group - Annapolis, MD

REVISIONS IN MARYLAND FORECLOSURE LAWS AND TIMELINES

 

     On April 3, 2008 Governor O'Malley signed emergency legislation restructuring Maryland's mortgage foreclosure laws.  The legislation features new requirements for deeds of trust and mortgages, pre-foreclosure filing notice requirements and personal service of the foreclosure complaint and a new consumer notice in an effort to provide borrowers more notice and information regarding foreclosure proceedings. 

 

     The new law dramatically changes procedures and time frames for foreclosure on Residential Property (property improved by 4 or fewer dwelling units)

 · In addition to a normal default letter, prior to filing a foreclosure proceeding a lender must send a 45 day Notice of Intent to Foreclose by regular and certified mail to the mortgagor, with a copy to the Commissioner of Financial Regulation.

 

 · Exceptions to the above 45 day notice requirement are allowed if the lender can prove borrower fraud, that no payments have ever been made on the loan, the property has been destroyed or the default occurred after a bankruptcy stay has been lifted.

 · Once the 45 day notice expires AND the loan is at least 90 days in default, a foreclosure action can be filed

 · The filing now includes additional documentation and affidavits and requires a statutory notice to the borrower warning that a sale can be held 45 days from the date the complaint to foreclose is served and providing contact information for reinstatement

 · Once docketed a copy of the Order to Docket the foreclosure along with all supporting documents must be personally served on each mortgagor (or left with person of suitable age at the mortgagor's dwelling house or usual place of abode)

 · If two good faith attempts at service prove unsuccessful an affidavit confirming such attempts must be filed with the court and the documents can be posted on the property and sent to mortgagor's last known address by regular and certified mail

 · Requires that on the borrower's request for reinstatement ("bring current") figures, the lender must provide the amount due and instructions for delivering funds within a reasonable period of time

 · Contrary to the terms of most loan documents, borrowers now have the statutory right to cure (i. e. "bring current") financial defaults up to one business day before the actual foreclosure sale

 · Other requirements are unchanged (including requirement for notice of sale date and process for ratification of sale by Court

 

     The effect of these changes is to significantly extend the time frame required for the filing of foreclosure and conducting of a foreclosure sale.

 

 (Right of Rescission of Homeowner of a "Residence in Default" Under the Protection of Homeowners in Default Act ["PHFA"])

 

In a largely ignored and misunderstood provision contained in the 2008 revisions to The Protection of Homeowners in Default Act ("PHFA")  the MD legislature has provided any "homeowner of a residence in default" with the unconditional right to rescind a contract of sale for the transfer of the residence in default within 5 days after execution of the contract.  Paragraph 50(d) of the current (10/1/08) MAR Contract has been revised to include notice of this right of rescission. The definition contained in PHFA of a "residence in default" is a "residential real property . . . occupied by the owner or owner's spouse or former spouse as a principal residence, and on which the mortgage is at least 60 days in default (emphasis added)."  There is no provision in PFHA, however, which requires that a seller or seller's agent disclose if the property is a "residence in default".  Paragraph 27 of the current MAR contract, however, provides that the "Seller agrees to keep existing mortgages free of default until settlement". This creates an interesting (and unanswered) question as to whether a seller who enters into a contract on a "residence in default" is entitled to the rescission, notwithstanding the seller's apparent default under paragraph 27 and gives rise to the following considerations:

a. Whether a seller and/or seller's agent/broker should consider modifying paragraph 27

  of the MAR contract if there is an existing default in a mortgage encumbering the

  property to be sold.

b. A purchaser and/or purchaser's agent/broker should be aware that, notwithstanding

  paragraph 27, if the property being purchased is a "residence in default", as defined

  (above) by PHFA, the 5 day right of rescission granted to the Seller by this statute may

  be applicable and enforceable even if the seller did not disclose that there was an

  existing default in the mortgage at the time the contract was accepted. 

 

Needless to say, this post is for informational purposes only and is not intended as legal advice to be used or depended upon in any specific transaction. All parties are advised to seek competent legal counsel with respect to these issues before entering into any transaction.

 

$8,000 Tax Credit For Home Buyers!

by The John Collins Real Estate Group - Annapolis, MD

GET YOUR PIECE OF THE OBAMA $787 BILLION STIMULUS BILL

$8,000 FIRST HOME BUYER TAX CREDIT

  • Tax credit is for first-time home buyers and principal residences only. 
  • The definition of a "First time home buyer" is someone who hasn't owned a principal residence for 3 years before the day of purchase.
  • You must purchase a home between January 1 and December 1, 2009. 
  • To qualify for the loan a Single buyers needs a gross modified adjusted gross  income of  $75,000 or less and a married couple $150,000, to qualify for the full credit.
  • The tax credit is refundable.  Even is you don't have much tax liability you can take advantage of the credit.
  • Buyers must own the home for a minimum of three years in order to capitalize on the credit.  If the home is sold before then, the buyer will have to return the credit to the government.  (Some exceptions apply)

 

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Contact Information

Photo of John Collins, Realtor Real Estate
John Collins, Realtor
JohnCollinsGroup of Long & Foster Real Estate, Inc
108 Old Solomons Island Road - U4
Annapolis MD 21401
Office: 410-224-4999
Cell: 410-693-6000
Fax: 410-224-4032 Email: John@JohnCollinsGroup.
John Collins, Realtor
 Office: 410-224-4999 * Cell: 410-693-6000
www.JohnCollinsGroup.Com
 of Long & Foster Real Estate, Inc.   
Office: 410-224-4999 Cell: 410-693-6000 Fax: 410-224-4032
Email -
John@JohnCollinsGroup.com
108 Old Solomons Island Road, Suite U-4
Annapolis, Maryland 21401

We will never sell or divulge your email address to any vendor or other organization.

The finest compliment I can receive is a referral from a friend, client or colleague. If you know of someone thinking of buying or selling real estate, I would appreciate an introduction.  Please be assured I will extend them my highest degree of service and professionalism. John Collins, Realtor