EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1223*
HOUSE BILL 1223
N1, D1 EMERGENCY BILL 3lr2863
By: Delegates Embry, Feldmark, and Kaufman
Introduced and read first time: February 10, 2023
Assigned to: Environment and Transportation
A BILL ENTITLED
AN ACT concerning 1
Foreclosure Actions – Responsibility of Secured Parties and Stay for 2
Determination of Financial Assistance 3
FOR the purpose of requiring the Commissioner of Financial Regulation in the Maryland 4
Department of Labor to adopt by emergency regulation a certain notice related to 5
the Maryland Homeowner Assistance Fund; prohibiting, with certain exceptions, a 6
secured party from initiating or proceeding with a foreclosure for a certain period if 7
the secured party receives a certain notice; requiring a secured party to make a 8
certain affidavit to the circuit court responsible for the foreclosure action when the 9
secured party makes certain filings; requiring the circuit court to award a stay in a 10
foreclosure action if a certain amount of time has not passed after a certain notice is 11
made; and generally relating to foreclosure actions for owner–occupied residential 12
properties in the State. 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY O F MARYLAND, 14
That: 15
(a) In this Act the following words have the meanings indicated. 16
(b) “Financial assistance” means a grant or loan. 17
(c) “Fund” means the Maryland Homeowner Assistance Fund operated by the 18
Department of Housing and Community Development. 19
(d) “Residential property” has the meaning stated in § 7–105.1 of the Real 20
Property Article. 21
SECTION 2. AND BE IT FURTHER ENACTED, That : 22
(a) Subject to the authority granted under § 10–111(b) of the State Government 23
Article and § 7–105.1(c) of the Real Property Article, the Commissioner of Financial 24 2 HOUSE BILL 1223
Regulation in the Maryland Department of Labor shall adopt by emergency regulation a 1
clearly marked notice that includes: 2
(1) a description of the Fund; 3
(2) the website, address, and phone number where homeowners can learn 4
about and apply for a grant or loan from the Fund; 5
(3) the name, e–mail address, and phone number of the administrator for 6
the Fund; and 7
(4) a statement that if the secured party is notified by the administrator 8
for the Fund that the mortgagor or grantor has a pending conditionally eligible application 9
for financial assistance from the Fund, the secured party may not initiate or proceed with 10
foreclosure of a lien on residential property for 120 days. 11
(b) The Commissioner of Financial Regulation shall adopt regulations to ensure 12
the notice required under subsection (a) of this section remains valid for the duration of 13
this Act. 14
SECTION 3. AND BE IT FURTHER ENACTED, That: 15
(a) In this section, “postfile mediation” and “prefile mediation” have the meanings 16
stated in § 7–105.1 of the Real Property Article. 17
(b) (1) This section applies only to a mortgagor or grantor who occupies 18
residential property subject to a foreclosure action. 19
(2) This section does not apply to an action for immediate foreclosure under 20
§ 7–105.1(b)(2) of the Real Property Article. 21
(c) (1) Except as provided in paragraph (2) of this subsection, if a secured party 22
receives notice from the administrator for the Fund that the mortgagor or grantor has a 23
pending conditionally eligible application for financial assistance from the Fund, the 24
secured party may not initiate or proceed with a foreclosure of a lien on residential property 25
for 120 days. 26
(2) A secured party may continue to engage in prefile mediation and 27
postfile mediation activities with a mortgagor or grantor during the period identified in 28
paragraph (1) of this subsection. 29
(d) (1) A secured party shall include an affidavit when the secured party files 30
with the court an order to docket, a complaint to foreclose, a motion to strike the request 31
for postfile mediation, or the documents required under § 7–105.4(c) of the Real Property 32
Article stating that: 33
(i) the secured party did not receive notice from the administrator 34 HOUSE BILL 1223 3
for the Fund that the mortgagor or grantor has a pending conditionally eligible application 1
for financial assistance from the Fund; or 2
(ii) 1. the secured party did receive notice from the 3
administrator for the Fund that the mortgagor or grantor has a pending conditionally 4
eligible application for financial assistance from the Fund; and 5
2. at least 120 days have passed since the secured party 6
received the notice identified in item (i) of this paragraph. 7
(2) The secured party shall include the affidavit filed with the court under 8
paragraph (1) of this subsection with any notice of the order to docket, complaint to 9
foreclose, motion to strike the request for postfile mediation, or foreclosure sale provided to 10
the mortgagor or grantor by law. 11
(3) If the court finds that 120 days have not elapsed since the secured party 12
received the notice from the administrator for the Fund that the mortgagor or grantor has 13
a pending conditionally eligible application for financial assistance from the Fund, the court 14
shall stay the foreclosure action for a period that complies with subsection (c)(1) of this 15
section. 16
SECTION 4. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall take 17
effect June 1, 2023. 18
SECTION 5. AND BE IT FURTHER ENACTED, That, subject to Section 4 of this 19
Act, this Act is an emergency measure, is necessary for the immediate preservation of the 20
public health or safety, has been passed by a yea and nay vote supported by three–fifths of 21
all the members elected to each of the two Houses of the General Assembly, and, except as 22
provided in Section 4 of this Act, shall take effect from the date it is enacted. It shall remain 23
effective through June 30, 2026, and, at the end of June 30, 2026, this Act, with no further 24
action required by the General Assembly, shall be abrogated and of no further force and 25
effect. 26