Homeowners get tools to fight foreclosure


Maryland’s top court has adopted new foreclosure procedure rules that requires lenders to notify homeowners and any guarantors that a foreclosure action has been filed. “For the first time, the door to the courthouse is now open to homeowners in foreclosure,” said Foreclosure Legal Assistance Project attorney Kathleen Skullney. “The thousands of Marylanders caught in the shoddy, negligent, or outright fraudulent mortgage products that have thrown them into default will be able to raise any illegalities in the process or the underlying loan as defenses to the foreclosure.

“Equally important, these homeowners no longer be barred by their inability to post a bond,” Skullney continued. “Furthermore, the homeowner can ask the court to stay the foreclosure if the property is involved in any collateral court proceeding, such as divorce. These are significant changes that go a long way toward balancing the foreclosure procedure, which by definition is ‘equitable’ in nature. These changes bring equity much closer to reality.”

The Court of Appeals voted yesterday to adopt the changes as proposed and made the effective date May 1.

There are several significant changes, including expanded definitions and notification requirements aimed at tenants. The most important and exciting change is the addition of new Rule 14-211 which allows any interested party to raise legal defenses to the foreclosure sale in a motion to stay/dismiss. The legal defenses include challenges to the validity of the loan or right to accelerate, or a collateral proceeding that involves the property. The rule also allows for limited discovery and does away with the onerous bond requirement for posting the entire amount of the debt.

Another small, but important change is the requirement that “occupants” get notices of the proceeding and sale. “This is the first time in Maryland that the plight of innocent tenants in a foreclosed property is procedurally recognized,” Skullney said. “At the very least, tenants will be able to avoid being thrown out of their homes without warning.”

The changes specific to foreclosure are identified as Category 1 in the 160th Rules Committee Report which can be found on the Judiciary website.


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