Md. Code Regs. 09.03.12.02

Current through Register Vol. 51, No. 8, April 19, 2024

Section 09.03.12.02 - Notice of Intent to Foreclose

A. Subject to §§ F, G, and H of this regulation, a person required to send a notice of intent to foreclose under Real Property Article, §7105.1, Annotated Code of Maryland, shall send a notice of intent to foreclose, which shall fully conform with §B, C, or D of this regulation.

B. Owner-Occupied Residential Property.

(1) Subject to §C of this regulation, a notice of intent to foreclose on owner-occupied residential property shall be in a form substantially similar to that in:

(a) Appendix A of this regulation if the loan is not a federally related mortgage loan;

(b) Appendix A-f of this regulation if the loan is a federally related mortgage loan; or

(c) With respect to a notice of intent to foreclose from a secured party offering prefile mediation for a loan that is not a federally related mortgage loan, Appendix A-1 of this regulation, as follows:

(i) Appendix A-1 shall be accompanied in the same envelope or package by the packets of documents and forms substantially similar to Schedule 1 (Prefile Mediation Packet) and Schedule 2 (Loss Mitigation Packet) of Appendix A-1 of this regulation.

(ii) Each of the documents and forms constituting Appendix A-1, Schedule 1, and Schedule 2 as required under subparagraph (i) of this paragraph shall be in the sequence of documents and forms presented in Appendix A-1, Schedule 1, and Schedule 2, respectively of this regulation. Appendix A-1 shall be the first in the sequence. Schedule 1 shall be the second in the sequence and shall be directly behind Appendix A-1. Schedule 2 shall be the third in the sequence and shall be directly behind Schedule 1. Appendix A-1, Schedule 1, and Schedule 2 shall be separated from each other by any reasonable method that ensures that the borrower can identify the forms and documents constituting each of Appendix A-1, Schedule 1, and Schedule 2.

(iii) The Loss Mitigation Application and Instruction required in Schedule 2 of Appendix A-1 may be in the form authorized under Regulation .03 of this chapter.

(d) With respect to a notice of intent to foreclose from a secured party offering prefile mediation for a loan that is a federally related mortgage loan, Appendix A-1(f) of this regulation, as follows:

(i) Appendix A-1(f) shall be accompanied in the same envelope or package by the packets of documents and forms substantially similar to Schedule 1 (Prefile Mediation Packet) and Schedule 2 (Loss Mitigation Packet) of Appendix A-1(f) of this regulation.

(ii) Each of the documents and forms constituting Appendix A-1(f), Schedule 1, and Schedule 2 as required under subparagraph (i) of this paragraph shall be in the sequence of documents and forms presented in Appendix A-1(f), Schedule 1, and Schedule 2, respectively. Appendix A-1(f) shall be the first in the sequence. Schedule 1 shall be the second in the sequence and shall be directly behind Appendix A-1(f), Schedule 2 shall be the third in the sequence and shall be directly behind Schedule 1. Appendix A-1(f), Schedule 1, and Schedule 2 shall be separated from each other by any reasonable method that ensures that the borrower can identify the forms and documents constituting each of Appendix A-1(f), Schedule 1, and Schedule 2.

(iii) The Loss Mitigation Application and Instruction required in Schedule 2(f) of Appendix A-1(f) may be in the form authorized under Regulation .03 of this chapter.

(2) For purposes of the notice set forth in §B(1) of this regulation, the names and license numbers of mortgage lender licensees and mortgage loan originator licensees are required to be included in the notice only if this information is included on or recorded with the security instrument securing the mortgage loan related to the notice, or is otherwise known to the person sending the notice. The person sending the notice set forth in §B(1) of this regulation may satisfy the requirement to include the license number of the mortgage lender licensee and mortgage loan originator licensee by including the NMLS unique identifier. If the mortgage lender was exempt from licensure under Financial Institutions Article, § 11-501 et seq., Annotated Code of Maryland, at the time the mortgage loan was made, then a mortgage lender license number is not required under this section. If the mortgage loan originator was exempt from licensure under Financial Institutions Article, § 11-601 et seq., Annotated Code of Maryland, at the time the mortgage loan was originated, then a mortgage lender license number is not required under this section.

(3) The notice of intent to foreclose shall be accompanied in the same envelope or package by:

(a) A loss mitigation application for loss mitigation programs that are applicable to the loan secured by the mortgage or deed of trust that is the subject of the notice. If the secured party does not have its own loss mitigation application, the secured party shall use the form of loss mitigation application set forth in Regulation .03 of this chapter;

(b) Instructions for completing the loss mitigation application with a telephone number to call to confirm receipt by the secured party, or representative of the secured party, of the completed application;

(c) A description of the eligibility requirements for the loss mitigation programs offered by the secured party that may be applicable to the loan secured by the mortgage or deed of trust that is the subject of the notice. If the mortgage loan is owned, securitized, insured, or guaranteed by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, or Federal Housing Administration, providing documentation to the borrower as required by those programs satisfies the requirement to provide a description of the eligibility requirement for the applicable loss mitigation program; and

(d) An addressed envelope in conformity with Regulation .10 of this chapter addressed to the person (an individual, a group of individuals, or a department such a "loss mitigation department") responsible for conducting the loss mitigation analysis on behalf of the secured party for the mortgage loan.

C. If the basis for the authority to foreclose on the owner-occupied residential property is a homeowners' association lien, condominium association lien, mechanic's lien, a similar statutory or contractual lien, or a basis other than a mortgage loan default, a notice of intent to foreclose shall be in a form substantially similar to that in Appendix B of this regulation.

D. Not an Owner-Occupied Residential Property.

(1) A notice of intent to foreclose on residential property that is not an owner-occupied residential property shall be in a form substantially similar to that in Appendix C of this chapter if the loan is not a federally related mortgage loan.

(2) A notice of intent to foreclose on residential property that is not an owner-occupied residential property shall be in a form substantially similar to that in Appendix C(f) of this chapter if the loan is a federally related mortgage loan.

(3) A notice of intent to foreclose under §D(1) or §D(2) of this regulation shall be sent to the borrower and record owner only if the secured party, or representative of the secured party, has a reasonable belief that the residential property is not owner-occupied residential property.

(4) If the borrower or record owner contests the determination that the residential property is not owner-occupied residential property, and it is determined that the residential property is owner-occupied residential property, the secured party shall send the appropriate notice of intent to foreclose in compliance with Real Property Article, § 7-105.1, Annotated Code of Maryland, and this regulation.

E. Any notice of intent to foreclose under this regulation may include a separate addendum, sequenced at the end of the notice of intent to foreclose, with any additional information, notice, or advice required as a prerequisite to commencing foreclosure by the terms of the deed of trust or mortgage that is the subject of the notice, government regulatory guidelines applicable to such deed of trust or mortgage or by the servicer, investor, or insurer of such deed of trust or mortgage, provided the additional information, notice, or advice does not contradict any information required to be contained in the notice of intent to foreclose.

F. Filing Electronically. A person required to send the Commissioner a copy of a notice of intent to foreclose under Real Property Article, § 7-105.1, Annotated Code of Maryland, shall meet that requirement by making an electronic submission within 5 business days of mailing a notice of intent to foreclose through the Maryland Foreclosure Registration System (the "System"). A link to the System is available on the Commissioner's website at http://www.labor.maryland.gov/finance.

G. The secured party, or representative of the secured party, shall include all information required in a form provided for under §B, C, or D of this regulation in the spaces indicated by brackets and blank lines.

H. A notice of intent to foreclose that is sent in compliance with Real Property Article, § 7-105.1, Annotated Code of Maryland, and is otherwise valid under the law, shall expire and will not be effective:

(1) If, after 1 year from the date on which it is sent to the borrower, an action to foreclose the mortgage or deed of trust pursuant to such notice of intent to foreclose has not been filed;

(2) If an action to foreclose the mortgage or deed of trust filed pursuant to such notice of intent to foreclose is dismissed by the appropriate adjudicative body;

(3) If the borrower cures the default described in the notice of intent to foreclose and becomes current on payment, whether pursuant to the terms of the mortgage or deed of trust or a loss mitigation agreement entered into by the parties;

(4) As provided for in Real Property Article, § 7-105.1(d)(18), Annotated Code of Maryland; or

(5) As provided for in §D(4) of this regulation.

I. If a notice of intent to foreclosure expires and becomes ineffective as provided for in §H(1) of this regulation, the secured party shall send a new notice of intent to foreclose in compliance with Real Property Article, § 7-105.1, Annotated Code of Maryland, and this regulation prior to filing an action to foreclose a mortgage or deed of trust on residential property.

J. The Commissioner shall retain an electronic copy of all submissions made on the System for at least 6 months.

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Md. Code Regs. 09.03.12.02

Regulation .02A amended effective March 15, 2010 (37:5 Md. R. 428)
Regulation .02C amended as an emergency provision effective November 26, 2010 (37:26 Md. R. 1784); emergency provision extended to 10/24/2011 (38:9 Md. R. 551); emergency provision expired
Regulations .02 repealed and new Regulations .02 adopted as an emergency provision effective October 25, 2011 (38:23 Md. R. 1416); emergency provision extended to July 30, 2012 (39:3 Md. R. 256); emergency provision extended to January 15, 2013 (39:15 Md. R. 961); emergency provision expired October 1, 2012 (39:21 Md. R. 1376)
Regulations .02 repealed and new Regulations .02 adopted as an emergency provision effective October 1, 2012 (39:21 Md. R. 1376); adopted permanently effective January 7, 2013 (39:26 Md. R. 1663)
Regulation .02 amended effective 41:24 Md. R. 1426, eff.12/11/2014; amended effective 44:13 Md. R. 621, eff. 7/3/2017; amended effective 49:26 Md. R. 1078, eff. 3/1/2023