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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 [email protected] or direct at 703-554- 6475.