Office of the Commissioner of Financial Regulation


Residential Mortgage Foreclosure Regulations (COMAR - .12) - Notice of Intent to Foreclose, Loss Mitigation Affidavit and Related Documents - Advisory


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In May 2010, the Office of the Commissioner of Financial Regulation issued an Advisory (the "2010 Advisory") to provide guidance on transitional issues with respect to Chapter 4851 of the Acts of 2010 (Real Property - Residential Property Foreclosure Procedures - Foreclosure Mediation), which made significant changes to the residential foreclosure process. Among other things, the 2010 Advisory stated that "[g]iven the prospective nature of House Bill 472, a [Notice of Intent to Foreclose ("NOI")] that is compliant with the law at the time it was sent is legally sufficient for purposes of being attached to an order to docket or complaint to foreclosure on or after [July 1, 2010]."

We have recently heard from more than one judicial circuit in Maryland that complaints and orders to docket have been filed with NOIs that were delivered more than a year ago, in some instances, two years ago. While we do not know the specific facts or circumstances of those cases, we have concerns. The 2010 Advisory was intended to address transition issues in connection with legislative changes and maintain the orderly processing of residential foreclosures in Maryland. The 2010 Advisory was not intended to provide that an NOI delivered on or before July 1, 2010 is perpetually valid. The Commissioner cannot determine the time at which an NOI should be reissued and defers to the Maryland Judiciary to make such determinations on a case-by-case basis. While this may create some limited uncertainty in the interim, this Advisory seeks to balance the need to protect homeowners while providing reasonable processes to transition to new legislative requirements.

Chapter 355 of the Acts of 2011 (Residential Property - Foreclosure - Required Documents - Timing of Mediation) transferred from statute to regulation various procedures as well as notices and forms relating to the foreclosure process. The Commissioner was tasked with making the notices and forms more understandable to borrowers for the purpose, among other things, of increasing the rates by which borrowers opt-in to mediation. Chapter 355 was approved by the Governor on May 10, 2011 and became effective on June 1, 2011.

Section 3 of Chapter 355 provides that until the effective date of the regulations2 that the Commissioner of Financial Regulation is required to adopt under § 7-105.1(f) of the Real Property Article, a copy of the order to docket or complaint to foreclose served on a mortgagor or grantor in compliance with Maryland law in effect immediately preceding June 1, 2011 shall be deemed to be in compliance with § 7-105.1(f) of the Real Property Article.

The Commissioner recognizes the practical reality that NOIs and related documents have been delivered to borrowers and loss mitigation affidavits have been executed from June 1, 2011 through the effective date of the regulations. In order to allow for the continued, orderly processing of residential mortgage foreclosures, the Commissioner supports a meaningful grace period for NOIs and related documents that were delivered and loss mitigation affidavits that were executed before October 25, 2011. As in 2010, this Advisory is meant to accommodate transitional issues and is not meant to imply that the documents executed or delivered before the effective date of the emergency regulations are perpetually valid.

1 House Bill 472
2 Emergency regulations carrying out the changes required by Chapter 355 have been approved by the Administrative, Executive, and Legislative Committee of the Maryland General Assembly to become effective on October 25, 2011.