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Start Over: New Foreclosure Requires a New Notice

Homeowners who have fought off foreclosure before deserve a new notice from the lender if foreclosure looms again, as Maryland’s highest court interprets the state’s foreclosure provisions strictly to require notice each time the process is started or re-started.

The Maryland Court of Appeals, Maryland’s highest court, recently held that lenders must give residential borrowers notice of their intent to foreclose before filing any complaint to foreclose, clarifying that when a case is dismissed without prejudice, meaning no one has waived any rights against each other and they can sue again, a new notice must be given before the case is reopened. 

The court held that lenders must provide a notice of intent to foreclose (“NOI”) when a foreclosure case, previously dismissed without prejudice, is reopened. The court held that when such a case is reopened on or after July 1, 2010, notice requirements must comply with 2010 amendments requiring information such as telephone numbers and internet addresses for government and nonprofit resources, and mandating expanded mediation opportunities for borrowers.

The court emphasized the intent of the legislature to provide information to residential borrowers to allow them an opportunity to take action to forestall a foreclosure filing, referencing a revised notice from the Maryland Commissioner of Financial Regulation, which regulates lenders’ activities in Maryland. The Commissioner noted “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.” The Commissioner’s revised notice stated that “[t]he 2010 Advisory was not intended to provide that an NOI delivered on or before July 1, 2010 is perpetually valid.”

Notably, the court declined to set an expiration date for a notice of intent to foreclose, but stated only that “[t]he NOI is not a blank check that will allow a lender to initiate a foreclosure proceeding against a borrower at any point in the future. It has a specific function to give borrowers notice of a potential foreclosure and allow them to pursue remediation of their default.”

The court’s holding provides a strict interpretation and enforcement of notice requirement pursuant to a legislative intend to allow residential borrowers an opportunity to prevent foreclosures. Borrowers should be aware of their right to receive notice of a lender’s intent to foreclosure, and, based on the open-ended expiration date of an NOI, lenders should ensure the NOI is timely. 

For more information please contact Vincent Guida at 410-583-2400 or guida@bowie-jensen.com.

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