New Maryland Laws affecting foreclosures, foreclosure frauds, mortgage fraud and prohibiting terms
On April 3, 2008, Governor O'Malley signed three new laws as emergency legislation. As emergency legislation, the bills take effect immediately. The bills were HB 360, 361 and 365. Highlights of the bills are:
FORECLOSURES
For the first time in nearly 200 years the foreclosure laws have been changed to provide greater protections for homeowners.
Personal service is now required. Under the old law the lender only had to show they mailed notice - not that the homeowner actually received notice.
The timing of foreclosures which previously could be done in as little as 15 days has now been expanded to a
minimum of 45 days after notice to the homeowner and then only if the loan is in default at least 90 days.
FORECLOSURE RESCUE FRAUD
When first enacted in 2005, this law provided exemptions for various licensed people. The new law now
removes the exemptions previously available for title insurers, title companies and lenders. These exemptions
were being used to evade and avoid the law. The changes is very good news for those who are victims of these
crimes.
MORTGAGE TERMS
This law prohibits prepayment penalties for certain loans
FORECLOSURES
For the first time in nearly 200 years the foreclosure laws have been changed to provide greater protections for homeowners.
Personal service is now required. Under the old law the lender only had to show they mailed notice - not that the homeowner actually received notice.
The timing of foreclosures which previously could be done in as little as 15 days has now been expanded to a
minimum of 45 days after notice to the homeowner and then only if the loan is in default at least 90 days.
FORECLOSURE RESCUE FRAUD
When first enacted in 2005, this law provided exemptions for various licensed people. The new law now
removes the exemptions previously available for title insurers, title companies and lenders. These exemptions
were being used to evade and avoid the law. The changes is very good news for those who are victims of these
crimes.
MORTGAGE TERMS
This law prohibits prepayment penalties for certain loans
I am considering whether to resume lending in Maryland. So, I need to read the entire law; not just a brief summary.
From the little data available it appears that mortgage lending in Maryland will be drastically curtailed.
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These bills were necessary. The comment that lending will be drastically reduced is unwarranted unless you mean that lenders will not make loans in Maryland unless they can engage in fraud. If that is true, then Marylanders do not need loans from lenders who engage in fraud.
Industry people also warned that not allowing them to foreclose in as little as 15 days will also reduce lending. These are the same lenders who make loans in states like Ohio and New York where it takes anywhere from 18 months to 2 years to foreclose. The threats were recognized for what they were - empty threats.
The laws are available in full at the Maryland General Assembly website: http://mlis.state.md.us
The Mortgage Fraud bill is HB 360 available at http://mlis.state.md.us/2008rs/billfile/hb0360.htm
The Protection for Homeowners in Foreclosure is HB 361 available at http://mlis.state.md.us/2008rs/billfile/hb0361.htm
The Foreclosure Bill and Recordation requirements is HB 365 available at
http://mlis.state.md.us/2008rs/billfile/hb0365.htm
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The idea that legal mortgage lending in Maryland will be adversely affected by the new laws is absurd. This myth is the current silliness from the lending industry hoping to continue fraudulent business practices in Maryland. What will be affected by the 2008 legislation is the ability of Maryland prosecutors to put the con-artists involved in mortgage fraud in jail and the ability of victims of these frauds to recover some of there losses.
Maryland has not had the teeth in its laws to preclude the rampant mortgage fraud and foreclosure rescue fraud that we have seen in the past few years. In 2005, Maryland had the insight and foresight to enact the Protection of Homeowners in Foreclosure Act (PHIFA). In the last couple of years, we have witnessed the failure of oversight at the federal level. The current Maryland Administration has continued the Maryland tradition of getting ahead of these problems. The 2008 legislative session strengthen PHIFA and enacted new laws designed to minimize mortgage fraud.
Michael Gregg Morin, Esq.
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Scott: I met you at a forum for foreclosures in Frederick.
I have been aware of your input to help pass the new law in the State of Maryland to help homeowners in foreclosures.
Does your firm provide with a combination representation of Bankruptcy, Foreclosure and/or Short Sale?
I have several homeowners that are facing this soon and I would like to find out if your firm could help them?
Please let me know.
Fernando Herboso
240-426-5754
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MARYLAND MORTGAGE FRAUD TASK FORCE HOLDS INAUGURAL MEETING
Seventeen Local, State and Federal Agencies Coordinate Their Efforts
to Combat Fraud and Seek Restitution
BALTIMORE, Maryland – Representatives of seventeen local, state and federal agencies today attended a meeting of the Maryland Mortgage Fraud Task Force to discuss recent prosecutions and ongoing investigations and to coordinate future civil and criminal enforcement actions.
U.S. Attorney Rod J. Rosenstein said, “Local, state and federal regulatory and investigative agencies are working to coordinate our mortgage fraud enforcement actions, identify appropriate cases for investigation and devote resources to pursue them. Today the Maryland Mortgage Fraud Task Force received briefings about recent cases in which we have pursued civil and criminal remedies for mortgage fraud, and we developed plans to hold even more con artists accountable and deter mortgage fraud in the future. We are going to seize cash, bank accounts, jewelry, artwork, houses, cars, boats and other assets that were purchased with ill-gotten gains, and return the money to the victims.”
The goals of the Task Force include: (1) streamline the procedures for criminal mortgage fraud referrals; (2) develop and implement a training program for state and federal investigators and prosecutors who handle mortgage fraud cases; (3) share useful information with and facilitate cooperation among the many agencies that have a stake in these cases; (4) track open investigations to ensure that partner agencies do not duplicate their efforts; (5) pursue asset forfeiture and secure restitution for victims; and (6) communicate information to the public in order to warn people about common schemes and help prevent them from becoming victims of mortgage fraud and related financial crimes.
Law enforcement objectives include prosecuting lawyers, accountants, appraisers and mortgage brokers who generate fraudulent loans and targeting schemes spawned by the mortgage crisis and economic downturn, such as so-called “foreclosure-prevention specialists” who prey on homeowners who fall behind on their mortgage payments.
The agenda for today’s meeting included briefings about recent mortgage fraud cases prosecuted in Maryland, an overview of mortgage fraud schemes and investigative strategies, a summary of civil and administrative remedies pursued by state agencies and a discussion of the Task Force’s objectives.
The following agencies participated in today’s Task Force meeting:
Maryland Department of Labor, Licensing & Regulation
Maryland Office of the Attorney General
Maryland Insurance Administration
Maryland Department of Human Resources
Maryland State Police
State’s Attorney’s Office for Baltimore City
State’s Attorney’s Office for Baltimore County
State’s Attorney’s Office for Montgomery County
State’s Attorney’s Office for Prince George’s County
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