New Foreclosure Law in Maryland

1. New Foreclosure Law in Maryland Presentation by the Maryland Department of Labor, Licensing and Regulation Friday, June 18, 2010

2. New Foreclosure Process • Pre-Foreclosure • Notice of Intent to Foreclose • Order to Docket • Mediation • Post-Mediation

3. Glossary • Loss Mitigation Analysis: • An evaluation of the facts and circumstances of a loan to determine whether the homeowner qualifies for a loan modification or whether any other loss mitigation programs may be made available.

4. Glossary • Loss Mitigation Program: • An option in connection with a loan that avoids foreclosure through a loan modification, short sale, deed in lieu of foreclosure, or any other alternative

5. Glossary • Preliminary Loss Mitigation Affidavit: • Certifies the status of an incomplete loss mitigation analysis – includes the reason(s) why the analysis is incomplete.

6. Glossary • Final Loss Mitigation Affidavit: • Certifies the completion of the final determination of loss mitigation analysis in connection with the mortgage or deed of trust or in certain instances states why no loss mitigation analysis is required. (If a loan modification or other loss mitigation was denied, provides an explanation for the denial.)

7. Glossary • Request for Mediation Form: • The official document that the homeowner will receive from the secured party/lender with a Final Loss Mitigation Affidavit. This form is the homeowner’s official request for mediation to be filed with the Circuit Court.

8. Glossary • Foreclosure Mediation: • A conference at which the parties in a foreclosure action appear before an impartial individual in an attempt to reach an agreement on a loss mitigation program for the homeowner.

10. Stages of the New Foreclosure Process

11. Notice of Intent to Foreclose (NOI) • Upgrades to the NOI Form • Information/resources on how to access housing counseling services • Explanation of the Maryland foreclosure process and timeline • Loss Mitigation Application and instructions, including a description of the eligibility requirements for programs offered by the secured party/lender • An envelope pre-printed with the address of the party responsible for conducting the loss mitigation analysis

12. NOI – What Does it Mean for You? • Counselors will now have a tangible document to complete with the homeowner • Pre-printed envelopes will cut down on lost faxes • Counselors need to stress urgency of timely submission of Loss Mitigation Applications

13. Order to Docket (OTD) • Will be filed with either a Preliminary or Final Loss Mitigation Affidavit • If secured party/lender cannot get in touch with the homeowner or they have not completed the analysis: Preliminary Loss Mitigation Affidavit • If secured party/lender has completed the analysis and deemed homeowner ineligible for any loss mitigation: Final Loss Mitigation Affidavit

14. OTD with Preliminary Loss Mitigation Affidavit • Another Loss Mitigation Application and a description of the eligibility requirements for loss mitigation programs that are applicable to the loan • Instructions for completing the application including directions to return the completed application to foreclosure attorney • Pre-printed envelope with address of attorney handling the foreclosure

15. OTD with Preliminary: What Does it Mean for You? • Make sure the homeowner brings a copy of the Order to Docket and Preliminary Loss Mitigation Affidavit • You will have a better understanding of what is needed and/or missing for loss mitigation review

16. OTD w/ Preliminary Loss Mitigation Affidavit – Next Steps • Final Loss Mitigation Affidavit may not be filed sooner than 28 days after SERVICE of the OTD with a Preliminary Loss Mitigation Affidavit • Inability to contact or obtain complete information is now a VALID basis for a Final Affidavit • LAST CHANCE for completion/submittal of Loss Mitigation Application

17. Final Loss Mitigation Affidavit What to Look For: • Request for Foreclosure Mediation Form • Pre-printed envelope with address of the Clerk of the Circuit Court • Pre-printed envelope with address of foreclosure attorney

18. Final Loss Mitigation Affidavit: What Does it Mean for You? What Happens Next: • Discuss Mediation as an option • Review affidavit, all original materials, and Request for Mediation Form • Discuss $50 filing fee • Discuss possibility of Motion to Strike • If homeowner chooses not to request mediation, he/she has 15 days from the date they are served with the Final Loss Mitigation Affidavit to file a Motion to Stay the foreclosure sale

19. Next Steps: Opt-in • If Opting-in to Mediation: • Help homeowner complete Request for Mediation Form • Include $50 filing fee or discuss waiver options

20. Request for Fee Waiver or Reduction • The court will rule on a request for a waiver or reduction of mediation filing fee • The court may make its ruling without a hearing • If the fee is not waived entirely, but is reduced, they will specify in the order the dollar amount to be paid and the amount of time (no longer than 10 days) to pay • If the sum is not paid within the time allowed the Request for Mediation will automatically be stricken

21. Possible Motion to Strike Mediation Request • Secured party/lender has 15 days to move to strike the Request for Mediation. Motion must be accompanied by an affidavit • There is a presumption of entitlement to mediation • Homeowner has 15 days to respond • Mediation referral moves forward while motion is pending

22. Possible Motion to Strike Mediation Request: What Does this Mean for You? • Discuss possibility of filing a response to the motion and the steps that need to be taken • If homeowner chooses not to respond and the motion is granted, the Office of Administrative Hearings (OAH) will be notified to cancel any scheduled mediation

23. Advertisement of Foreclosure Sale • A sale may not be advertised until the 20 days after a Final Loss Mitigation Affidavit is filed, but if a Request for Foreclosure Mediation is filed within that time and not stricken, a sale may not be advertised until the report from OAH is filed with the court

24. When Foreclosure Sale May Occur • If mediation is not requested: • If OTD w/Final Loss Mitigation Affidavit – 45 days from service of OTD • If OTD w/Prelim Loss Mitigation Affidavit – 30 days from mailing date of Final Loss Mitigation Affidavit

25. When Foreclosure Sale May Occur Con’t • If mediation is requested: • If mediation occurs – at least 15 days after date of mediation • If no mediation occurs – at least 15 days after OAH files its report with the court. (Notice of mediation date informs parties that if they fail to appear, the date OAH sends the report to the court is when the 15 days starts.)

26. Motion to Stay Foreclosure Sale • Filed no later than 15 days from the date the Final Loss Mitigation Affidavit is filed (if mediation is not requested) • Filed no later than 15 days after the date a motion to strike foreclosure mediation is granted

27. Motion to Stay the Foreclosure Sale • If foreclosure mediation was requested and the request was not stricken: • No later than 15 days from the date the foreclosure mediation was held • No later than 15 days from the date OAH filed with the court a report stating that no foreclosure mediation was held • No later than 15 days from the expiration of the 60 days after transmittal of the request for mediation

28. Questions