Foreclosure and Blighted Property: Tools for Municipal Officials

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1 October 10, 2018 MML Fall Conference Foreclosure and Blighted Property: Tools for Municipal Officials Meredith Mishaga, Director of Financial Education and Community Outreach Office of the Commissioner of Financial Regulation (OCFR) Maryland Department of Labor, Licensing and Regulation

2 DISCLAIMER The views expressed in this presentation are those of the presenter(s) alone and do not necessarily reflect the position of the commissioner of financial regulation or the secretary of the Department of Labor, Licensing & Regulation. This presentation contains general information only, and is not legal advice.

3 Foreclosure and Blighted Property: Tools for Municipal Officials OCFR Overview and Jurisdiction Foreclosure Process in Maryland Foreclosed Property Registry Notice of Foreclosure Filing Updated Information and Notification Requirements New Foreclosure Registration System Contact Information

4 Overview of OCFR The Office of the Commissioner of Financial Regulation (OCFR) is a division within the Maryland Department of Labor, Licensing and Regulation. OCFR is responsible for chartering, licensing, and supervising certain individuals and businesses providing financial services to Maryland consumers. OCFR conducts periodic examinations and investigations to ensure compliance with state and federal laws and regulations, and to ensure the safety and soundness of these entities. OCFR responds to consumer complaints against supervised entities, and undertakes enforcement actions for violations of laws and regulations.

5 OCFR s Jurisdiction State-chartered entities include state banks, credit unions, and trust companies. Non-depository licensee and registrant categories include: Check Cashers Collection Agencies Consumer Lenders Credit Reporting Agencies Credit Services Businesses Debt Management Providers Debt Settlement Companies Installment Lenders Money Transmitters Mortgage Lenders, Brokers, and Servicers Mortgage Loan Originators Sales Finance Companies

6 Foreclosure Process in Maryland This is a SUMMARY of the mortgage foreclosure process for residential properties in Maryland. This graphic should not be interpreted as legal advice, nor is it a depiction of the full and complete foreclosure process. Some information has been removed for simplicity. Missed Payment (or other contractual default) 90+ days (120+ if federal) Notice of Intent to Foreclose Warning notice mailed to borrower; must be sent at least 45 days prior to Order to Docket Order to Docket or Complaint to Foreclose First legal action filed in Circuit Court and served on borrower; the Final Loss Mitigation Affidavit will be with this filing or mailed at least 28 days later Preliminary Loss Mitigation Affidavit Final Loss Mitigation Affidavit Explanation of why borrower has been denied loss mitigation Foreclosure Mediation If eligible, borrower submits request Foreclosure Sale - Purchaser may record the Deed any time after Ratification Ratification of Sale Foreclosure sale is approved by Court 30+ days 30+ or 45+ days (additional days if mediation) Foreclosure Sale property is auctioned and purchased by secured party or third party bidder

7 Foreclosed Property Registry Tool for local jurisdictions to combat foreclosure-related blight and public safety issues in residential communities Created per legislation enacted during 2012 General Assembly Session (Real Property ) Purchaser required to register the property within 30 days of the foreclosure sale - Property information: full address, single-family/multi-family/unknown, vacant/not vacant/unknown, in possession/not in possession/unknown - Date of foreclosure sale - Purchaser name, address, , phone - Entity accepting legal service name, address, , phone - Maintenance company name, address, , phone General access may be granted only to Maryland county and municipal staff, city and county elected officials, and state agencies. Property-specific information may be released to certain parties (refer to statute for details). Enforcement authority lies with local jurisdictions

8 Foreclosed Property Registry Data 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Number of Foreclosed Property Registrations Received per Fiscal Year (July-June) 15,755 17,375 15,012 11,461 Number of Registrations 8,195 FY14 FY15 FY16 FY17 FY18

9 Notice of Foreclosure Filing Legislation enacted during 2017 General Assembly Session requires Notice of Foreclosure (Real Property ) Person authorized to make the sale required to submit notice within 7 days of filing Order to Docket or Complaint to Foreclose - Street address of property - Person authorized to make sale name, address, phone - Tax account number (if known) - Whether or not property is vacant (if known) - Property owner name, address and phone (if known) - Person authorized to manage and maintain property before the sale name, address, phone (if known) General access may be granted only to Maryland county and municipal staff, city and county elected officials, and state agencies. Property-specific information may be released to certain parties (refer to statute for details). Effective October 1, 2018

10 Legislation enacted during 2018 General Assembly Session requires updated information and notice to local governments (House Bill 78/Senate Bill 222). Purchaser required to submit to the Foreclosed Property Registry any change to the following information in an initial registration, within 21 days after change is known: - Entity accepting legal service name, address, , phone - Maintenance company name, address, , phone - Whether or not the property is vacant - Whether the purchaser has possession OCFR required to promptly notify authorized county and municipal users of receipt of, or any change to, an initial registration. Notification must be by electronic means. Effective January 1, 2019 Updated Information and Notification Requirements

11 New Foreclosure Registration System OCFR launched a new Foreclosure Registration System with the Notice of Foreclosure on October 1, New system integrates all notices and registrations required to be submitted to OCFR during foreclosure process. Highlighted features include: - Users only need one account to access all notices and registrations - No documentation required for government officials to create an account - Standardized formatting and validation of property addresses - Ability to search for notices and registrations using partial addresses and/or multiple criteria, and to view search results on-screen Current Foreclosed Property Registry is being migrated to the new system and will incorporate the requirements mandated in HB78/SB222 Anticipated completion date (for Registry): January 1, 2019

12 FORECLOSURE ADMINISTRATION (410)