CHAPTER 6

 

(House Bill 361)

 

 

AN ACT concerning

 

 

Protection of Homeowners in Foreclosure – Prohibition on Foreclosure

Rescue Transactions – Enforcement

 

 

FOR  the  purpose  of  altering  the  applicability  of  certain  provisions  relating  to  the

protection  of  homeowners  in  foreclosure;  altering  the  contents  of  a  certain

foreclosure   consulting   contract;   prohibiting   a   foreclosure   consultant   from

engaging   in   or   arranging   a   foreclosure   rescue   transaction   or   receiving   a

commission   or   money   under   certain   circumstances;   requiring   a   foreclosure

consultant to be licensed as a real estate broker and to provide certain research

to   a   homeowner   under   certain   circumstances;   repealing   certain   provisions

concerning   foreclosure   reconveyances;   authorizing   a   homeowner   to   cancel

rescind a contract for the sale or transfer of a residence in default under certain

circumstances;  requiring  a  contract  for  the  sale  or  transfer  of  a  residence  in

default to contain certain notices and attachments under certain circumstances;

imposing   certain   prohibitions   on   a   purchaser   of   a   residence   in   default;

authorizing   the   Commissioner   of   Financial   Regulation   to   enforce   certain

provisions  concerning  the  protection  of  homeowners  in  foreclosure;  making  a

violation  of  this  Act  an  unfair  or  deceptive  trade  practice  under  the  Maryland

Consumer   Protection   Act;   requiring   the   Attorney   General   or   the   State’s

Attorney   to   notify   the   Commissioner   of   certain   convictions;   altering   and

defining  certain  terms;  making  stylistic  and  conforming  changes;  making  this

Act   an   emergency   measure;   and   generally   relating   to   the   protection   of

homeowners in foreclosure.

 

 

BY repealing and reenacting, with amendments,

Article – Commercial Law

Section 13–301(14)(xxii)

Annotated Code of Maryland

(2005 Replacement Volume and 2007 Supplement)

 

 

BY adding to

Article – Commercial Law

Section 13–301(14)(xxiv)

Annotated Code of Maryland

(2005 Replacement Volume and 2007 Supplement)

 

 

BY repealing and reenacting, with amendments,

Article – Real Property

 

 

 

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Ch. 6                                        MARTIN O’MALLEY, Governor

 

 

Section  7–301  to  be  under  the  amended  subtitle  “Subtitle  3.  Protection  of

Homeowners  in  Foreclosure  Act”,  7–302,  7–305,  7–306,  and  7–307;  and

7–310  to  be  under  the  amended  part  “Part  III.  Sales  or  Transfers  of

Residences in Default”, 7–311, 7–314, 7–315, 7–319, and 7–320

Annotated Code of Maryland

(2003 Replacement Volume and 2007 Supplement)

 

 

BY adding to

Article – Real Property

Section 7–308, 7–309, 7–310, 7–313, 7–318.1, and 7–322; and 7–325 to be under

the new part “Part VI. Short Title”

Annotated Code of Maryland

(2003 Replacement Volume and 2007 Supplement)

 

 

BY repealing and reenacting, without amendments,

Article – Real Property

Section 7–318 and 7–321

Annotated Code of Maryland

(2003 Replacement Volume and 2007 Supplement)

 

 

SECTION    1.    BE    IT    ENACTED    BY    THE    GENERAL    ASSEMBLY    OF

MARYLAND, That the Laws of Maryland read as follows:

 

 

Article – Commercial Law

 

 

13–301.

 

 

Unfair or deceptive trade practices include any:

 

 

(14)     Violation of a provision of:

 

 

(xxii)  Section 14–1319 or § 14–1320 of this article; [or]

 

 

(XXIV)          TITLE  7,  SUBTITLE  3  OF  THE  REAL  PROPERTY

ARTICLE, THE PROTECTION OF HOMEOWNERS IN FORECLOSURE ACT; OR

 

 

Article – Real Property

 

 

Subtitle 3. Protection of Homeowners in Foreclosure ACT.

 

 

7–301.

 

 

(a)       In this subtitle the following words have the meanings indicated.

 

 

(B)     “COMMISSIONER”   MEANS    THE    COMMISSIONER    OF    FINANCIAL

REGULATION IN THE DEPARTMENT OF LABOR, LICENSING, AND REGULATION.

 

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Ch. 6

 

 

 

 

[(b)] (C)        “Foreclosure consultant” means a person who:

 

 

(1)       Solicits or contacts a homeowner in writing, in person, or through

any  electronic  or  telecommunications  medium  and  directly  or  indirectly  makes  a

representation or offer to perform any service that the person represents will:

 

 

 

foreclosure sale;

 

(i)        Stop, enjoin, delay, void, set aside, annul, stay, or postpone a

 

 

 

 

mortgagee;

 

(ii)       Obtain    forbearance    from    any    servicer,    beneficiary    or

 

 

 

(iii)      Assist  the  homeowner  to  exercise  a  right  of  reinstatement

provided  in  the  loan  documents  or  to  refinance  a  loan  that  is  in  foreclosure  and  for

which notice of foreclosure proceedings has been published;

 

 

(iv)      Obtain   an   extension   of   the   period   within   which   the

homeowner may reinstate the homeowner’s obligation or extend the deadline to object

to a ratification;

 

 

(v)       Obtain  a  waiver  of  an  acceleration  clause  contained  in  any

promissory  note  or  contract  secured  by  a  mortgage  on  a  residence  in  [foreclosure]

DEFAULT or contained in the mortgage;

 

 

(vi)      Assist the homeowner to obtain a loan or advance of funds;

 

 

(vii)     Avoid  or  ameliorate  the  impairment  of  the  homeowner’s

credit  resulting  from  the  filing  of  an  order  to  docket  or  a  petition  to  foreclose  or  the

conduct of a foreclosure sale;

 

 

(viii)   Save the homeowner’s residence from foreclosure;

 

 

(ix)      Purchase  or  obtain  an  option  to  purchase  the  homeowner’s

residence within 20 days of an advertised or docketed foreclosure sale; OR

 

 

(x)       Arrange  for  the  homeowner  to  become  a  lessee  or  renter

entitled  to  continue  to  reside  in  the  homeowner’s  residence  AFTER   A   SALE   OR

TRANSFER;

 

 

[(xi)    Arrange for the homeowner to have an option to repurchase

the homeowner’s residence; or

 

 

(xii)     Engage   in   any   documentation,   grant,   conveyance,   sale,

lease,   trust,   or   gift   by   which   the   homeowner   clogs   the   homeowner’s   equity   of

redemption in the homeowner’s residence;] or

 

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Ch. 6                                        MARTIN O’MALLEY, Governor

 

 

 

 

(2)       Systematically  contacts  owners  of  [property  that  court  records  or

newspaper   advertisements   show   are   in   foreclosure   or   in   danger   of   foreclosure]

RESIDENCES IN DEFAULT TO OFFER FORECLOSURE CONSULTING SERVICES.

 

 

[(c)] (D)        “Foreclosure    consulting    contract”    means    a    written,    oral,   or

equitable  agreement  between  a  foreclosure  consultant  and   a  homeowner  for   the

provision of any foreclosure consulting service [or foreclosure reconveyance].

 

 

[(d)] (E)        “Foreclosure consulting service” includes:

 

 

(1)       Receiving  money  for  the  purpose  of  distributing  it  to  creditors  in

payment  or  partial  payment  of  any  obligation  secured  by  a  lien  on  a  residence  in

[foreclosure] DEFAULT;

 

 

(2)       Contacting creditors on behalf of a homeowner;

 

 

(3)       Arranging or attempting to arrange for an extension of the period

within  which  a  homeowner  may  cure  the  homeowner’s  default  and  reinstate  the

homeowner’s obligation;

 

 

(4)       Arranging or attempting to arrange for any delay or postponement

of the sale of a residence in [foreclosure] DEFAULT;

 

 

(5)       Arranging  or  facilitating  the  purchase  of  a  homeowner’s  equity  of

redemption  or  legal  or  equitable  title  [within  20  days  of  an  advertised  or  docketed

foreclosure sale];

 

 

(6)       [Arranging   or   facilitating   any   transaction   through   which   a

homeowner will become a lessee, optionee, life tenant, partial homeowner, or vested or

contingent remainderman of the homeowner’s residence;

 

 

(7)]     Arranging or facilitating the sale of a homeowner’s residence or the

transfer of legal title, in any form, to another party as an alternative to foreclosure; OR

 

 

[(8)     Arranging  for  a  homeowner  to  have  an  option  to  repurchase  the

homeowner’s residence after a sale or transfer;

 

 

(9)] (7)          Arranging  for  or  facilitating  a  homeowner remaining in  the

homeowner’s  residence  AFTER  A  SALE  OR  TRANSFER  as  a  tenant,  renter,  or  lessee

UNDER TERMS PROVIDED IN A WRITTEN LEASE[; or

 

 

(10)     Arranging  or  facilitating  any  other  grant,  conveyance,  sale,  lease,

trust, or gift by which a homeowner clogs the homeowner’s equity of redemption in the

homeowner’s residence].

 

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