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HB 769

Real Property - Residential Foreclosures - Commencement Restrictions

2025 Regular Session Introduced by Nick Allen and 15 co-sponsors

HB 769 limits starting foreclosures on long-delinquent, owner-occupied mortgages: a 10-year filing deadline plus required loan-notice communications and proof of compliance.

Referred Judicial Proceedings
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Bill Summary · HB 769

Summary — HB 769: Real Property — Residential Foreclosures — Commencement Restrictions

Status: Referred to Judicial Proceedings (introduced Jan 29, 2025).
Key citation(s) added/amended: Art. — Real Property §7‑105.1 (e)(1) and new §7‑105.19.
Effective date (per fiscal note): June 1, 2025.

Purpose

HB 769 seeks to restrict and clarify when secured parties may commence foreclosure on owner‑occupied residential mortgages that have been long delinquent. The bill creates procedural safeguards for mortgagors and imposes additional documentation and notice requirements on lenders, servicers, and purchasers of long‑defaulted debt.

Major provisions / changes

  • 10‑year filing limit: An order to docket (OTD) or a complaint to foreclose on residential property must be commenced no later than 10 years after the date of the default claimed in the pleading (new §7‑105.1(e)(3)).
  • New definition — "materially delinquent mortgage": A mortgage with no payments made by anyone other than the secured party in the preceding 5 years (excluding periods where foreclosure was legally prohibited, e.g., by executive order).
  • Loan‑related correspondence requirement: Unless prohibited by law, a secured party must send written “loan‑related correspondence” to the mortgagor in each billing cycle for a materially delinquent mortgage. The bill defines the minimum contents of such correspondence (servicer contact, outstanding principal, current interest rate, amounts due itemized, and date of last payment).
  • Transitional enforcement standard (short form):
    • Prior to Oct 1, 2027: a secured party may enforce a materially delinquent mortgage by foreclosure only if either (a) at least one piece of loan‑related correspondence was sent to the mortgagor in each billing cycle for the immediately preceding 24 months (excluding prohibited periods), or (b) the secured party served a Commissioner‑prescribed form notice at least 90 days before commencing.
    • On/after Oct 1, 2027: (text truncated in source — bill moves to stricter ongoing requirements).
  • Debt‑buyer documentation: If foreclosure is commenced by a secured party that acquired debt that was in default for 5+ years before acquisition, the secured party must attach, with the OTD or complaint, the documents generally required from debt buyers/collectors under Courts & Judicial Proceedings §5‑1203(b).
  • Pleadings: OTD/complaint must include an affidavit stating whether the debt instrument is a materially delinquent mortgage and that any statutory preconditions have been met.
  • Affirmative defense: Mortgagors are permitted to raise laches (unreasonable delay) as a defense to enforcement of materially delinquent mortgages.

Who is affected

  • Mortgagors/owner‑occupants: gain procedural protections, enhanced notice and potential defenses against enforcement of very old delinquencies.
  • Secured parties (lenders, servicers, debt purchasers): face added notice, documentation, and timing constraints before initiating foreclosure on long‑dormant accounts.
  • Small mortgage holders/debt buyers: could face meaningful compliance costs (Fiscal Note: “Potential meaningful” small business effect).
  • Courts: will receive OTDs/complaints with additional affidavit and documentary requirements; fiscal note expects no material State/local fiscal impact.

Procedural notes & impact

  • The bill amends the existing Maryland foreclosure framework (NOI, OTD/complaint, mediation, filing affidavits). It explicitly preserves the court’s ability to grant petitions to commence foreclosure immediately under current statutory exceptions (fraud, no payments ever made, destruction, post‑bankruptcy stay, vacant/abandoned property).
  • Fiscal note: State and local finances not materially affected; small businesses potentially meaningfully affected by compliance requirements.

If you want, I can: (1) produce a side‑by‑side comparison showing how current law would change, (2) draft a plain‑language notice template consistent with the bill’s loan‑related correspondence requirements, or (3) extract and summarize the bill’s full timeline and committee actions.

Compiled from official sources — confirm details with the bill’s official record.

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