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.
Under the Act, the criteria the Court may consider in determining whether a property is vacant and abandoned is as follows:
· 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.
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.
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.
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.
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.
A copy of the legislation is available here: http://mgaleg.maryland.gov/2017RS/Chapters_noln/CH_617_sb1033t.pdf
Should you have any questions regarding the above please feel free to contact Orlans PC Attorney Hugh Green at firstname.lastname@example.org or direct at 703-554- 6475.