Real Property - Residential Foreclosures - Materially Delinquent Mortgages
If enacted, SB682 would amend existing statutes concerning foreclosure processes in Maryland. It clarifies the definition of 'materially delinquent mortgages' and establishes that secured parties cannot commence foreclosure actions until specific criteria are met. These changes are positioned to protect homeowners by ensuring they are adequately informed about their mortgage status and the consequences of delinquency. Furthermore, by permitting mortgagors to raise a defense of laches in foreclosure actions, the bill introduces a layer of accountability for lenders regarding their enforcement actions over time.
Senate Bill 682, titled 'Real Property - Residential Foreclosures - Materially Delinquent Mortgages', seeks to reshape the framework for enforcing residential mortgages that have become materially delinquent. Specifically, the bill mandates that secured parties (lenders) must provide certain loan-related correspondences to mortgagors (borrowers) before initiating foreclosure actions on delinquent properties. This legislation introduces criteria that safeguard mortgagors by requiring communication within each billing cycle and sets clear timelines for foreclosure proceedings, thereby amplifying borrowers' rights within the context of their mortgage agreements.
While the intent of SB682 is largely viewed as protective towards borrowers, it has drawn criticism from lenders and financial institutions who argue that the increased regulatory requirements could complicate and prolong the foreclosure process. Opponents of the bill anticipate that the added communication and procedural steps could lead to greater difficulties for lenders trying to enforce their rights under mortgage agreements. Proponents argue that these measures are essential to substantial homeowner protection, particularly in economic climates where job and income instability may lead to greater rates of delinquency.