Maryland Foreclosure Defense, Mediation Request, Counterclaims & Loss Mitigation Package

MARYLAND FORECLOSURE DEFENSE, MEDIATION REQUEST, COUNTERCLAIMS & LOSS MITIGATION PACKAGE

(Hybrid Non-Judicial / Judicial — Order to Docket Required Prior to Sale)

PART 1 — PRE-DEFENSE INTAKE CHECKLIST

Documents to Collect

☐ Notice of Intent to Foreclose (NOI) — RP § 7-105.1(c), § 7-105.2
☐ Loss Mitigation Application form mailed with NOI
☐ Order to Docket (and all attached affidavits/exhibits)
☐ Note (front/back, all indorsements)
☐ Recorded Deed of Trust / Mortgage
☐ All recorded Assignments
☐ Deed of Appointment of Substitute Trustees
☐ Preliminary Loss Mitigation Affidavit / Final Loss Mitigation Affidavit
☐ Request for Postfile Mediation form
☐ Servicing payment history
☐ All loss-mitigation applications and decisions
☐ Breach / acceleration letter
☐ Reg X / Reg Z notices

Statutory & Rule Audit

☐ NOI mailed at least 45 days before filing (RP § 7-105.1(c))?
☐ NOI included loss-mitigation application?
☐ Loan was 90+ days delinquent before NOI (or 45 days if filed earlier)?
☐ Order to Docket includes all documents required by RP § 7-105.1(d) and Md. Rule 14-207?
☐ Substitute Trustee Deed of Appointment recorded?
☐ Preliminary LMA filed → final LMA filed at least 28 days later (RP § 7-105.1) and at least 30 days before sale?
☐ Request for Postfile Mediation form served with final LMA?
☐ Federal 120-day rule satisfied (12 C.F.R. § 1024.41(f))?
☐ Live-contact and 45-day notices under 12 C.F.R. § 1024.39?
☐ Sale advertisement once a week for 3 successive weeks, first publication ≥ 15 days before sale, last publication ≤ 1 week before sale (RP § 7-105.1(o))?

PART 2 — REQUEST FOR PREFILE MEDIATION (RP § 7-105.1(c))

[Date]

[Secured Party / Servicer — at address on NOI]
Copy to: Office of Administrative Hearings — Foreclosure Mediation Unit

Re: Loan No. [_______________] Borrower: [_______________] Property: [_______________]

Pursuant to Md. Code, Real Property § 7-105.1(c)(3), Borrower hereby elects to participate in PREFILE MEDIATION. The completed prefile mediation application is enclosed. Please notify the Office of Administrative Hearings within 5 business days of receipt under RP § 7-105.1(c)(5).

_______________________________
[Borrower / Counsel]

PART 3 — REQUEST FOR POSTFILE MEDIATION (Md. Rule 14-209.1)

IN THE CIRCUIT COURT FOR [_______________] COUNTY, MARYLAND

Case No. [_______________]

REQUEST FOR FORECLOSURE MEDIATION (Md. Rule 14-209.1)

Pursuant to Md. Rule 14-209.1 and the Request for Foreclosure Mediation form served with the Final Loss Mitigation Affidavit, Defendant requests foreclosure mediation. Enclosed is the $50 filing fee (or executed fee waiver request).

Defendant intends to participate in good faith and to be evaluated for all available loss-mitigation options.

Date: [__/__/____]

_______________________________
[Borrower / Counsel]

PART 4 — MOTION TO STAY OR DISMISS (Md. Rule 14-211)

IN THE CIRCUIT COURT FOR [_______________] COUNTY, MARYLAND

[Caption]

MOTION TO STAY THE SALE AND DISMISS THE ACTION (Md. Rule 14-211)

Defendant moves the Court to stay the foreclosure sale and dismiss this action and states:

1. Defendant is the owner of the Property and the mortgagor under the Deed of Trust at issue.

2. Procedural Defects. [Check applicable]:
   ☐ The Notice of Intent to Foreclose required by RP § 7-105.1(c) and § 7-105.2 was not sent at least 45 days before the Order to Docket;
   ☐ The NOI did not include the loss-mitigation application required by regulation of the Commissioner of Financial Regulation;
   ☐ The Order to Docket does not include all documents required by RP § 7-105.1(d) and Md. Rule 14-207;
   ☐ The Substitute Trustees were not properly appointed by recorded Deed of Appointment;
   ☐ Service of process was defective;
   ☐ The Preliminary or Final Loss Mitigation Affidavit was not properly filed or served;
   ☐ A completed loss-mitigation application was submitted at least 37 days before sale and has not been evaluated under 12 C.F.R. § 1024.41(c);
   ☐ Other: [_______________].

3. Substantive Defenses. Plaintiffs have no right to foreclose because:
   ☐ Lack of standing — the Note is not held by the secured party for whom the Substitute Trustees act;
   ☐ Defective chain of assignment;
   ☐ Conditions precedent under paragraph 22 of the Deed of Trust (notice of default; right to cure) were not satisfied;
   ☐ Wrongful acceleration / inaccurate default amount;
   ☐ Improper application of payments / unauthorized fees / force-placed insurance inflate the alleged default;
   ☐ Plaintiffs/Servicer have violated 12 C.F.R. § 1024.41 by dual-tracking the foreclosure;
   ☐ Borrower tendered timely cure / reinstatement and it was refused.

4. Final Determination of Loss-Mitigation Application Outstanding (RP § 7-105.1(p)). A complete loss-mitigation application was received by the secured party more than 37 days before the scheduled sale and a final determination has not been issued.

WHEREFORE, Defendant requests that the Court STAY the sale and DISMISS this action; or, in the alternative, STAY the sale until the loss-mitigation evaluation is complete.

Date: [__/__/____]

_______________________________
[Counsel — Att'y No.]

MEMORANDUM IN SUPPORT

[Set forth specific factual basis with exhibits — loan documents, payment records, NOI deficiencies, servicing letters, denial letters, evidence of dual-tracking. Cite RP § 7-105.1; Md. Rule 14-211, 14-209.1; 12 C.F.R. § 1024.41; relevant cases (e.g., Bates v. Cohn, 417 Md. 309 (2010); Svrcek v. Rosenberg, 203 Md. App. 705 (2012)).]

REQUEST FOR HEARING

Defendant requests a hearing under Md. Rule 14-211(b)(2).

AFFIDAVIT (Required by Rule 14-211(a)(3)(B))

I, [_______________], state under oath that the factual allegations in this Motion are true and correct based on my personal knowledge.

_______________________________
[Defendant]

[Notary block]

PART 5 — COUNTERCLAIM (Separate Action or as Counterclaim)

Count I — Violation of RESPA / Regulation X (12 U.S.C. § 2605; 12 C.F.R. §§ 1024.35, 1024.36, 1024.39, 1024.41)

Defendant Servicer failed to timely acknowledge / respond to NOEs and RFIs; failed to make live-contact early intervention; failed to evaluate complete loss-mitigation application; dual-tracked the foreclosure. Damages, statutory damages up to $2,000/violation, fees and costs.

Count II — Violation of FDCPA (15 U.S.C. § 1692)

Substitute Trustees and Servicer (when loan was in default at acquisition) are debt collectors; made false / misleading representations under § 1692e and used unfair practices under § 1692f. Damages, statutory damages up to $1,000, fees and costs.

Count III — Violation of FCRA (15 U.S.C. § 1681s-2(b))

Failure to investigate disputes and to correct inaccurate tradeline data. Damages, statutory and punitive damages, fees and costs.

Count IV — Maryland Consumer Protection Act (Md. Code, Commercial Law § 13-301, § 13-303, § 13-408)

Unfair and deceptive trade practices in connection with consumer mortgage servicing. Damages, restitution, attorney's fees. See Andrews & Lawrence Prof'l Servs., LLC v. Mills, 467 Md. 126 (2020).

Count V — Maryland Consumer Debt Collection Act (Md. Code, Commercial Law § 14-202)

Servicer and law firm engaged in prohibited collection practices. Damages and fees.

Count VI — Breach of Contract / Breach of Implied Covenant of Good Faith.

Count VII — Quiet Title / Slander of Title / Declaratory Judgment (Md. Cts. & Jud. Proc. § 3-406).

PART 6 — LOSS MITIGATION APPLICATION PACKAGE (Regulation X)

Cover Letter

[Date]
[Servicer Loss Mitigation]

Re: Loan No. [_______________] Borrower: [_______________] Property: [_______________]

Borrower submits a COMPLETE loss-mitigation application under 12 C.F.R. § 1024.41. Please evaluate Borrower for ALL options:

☐ Modification (flex / streamline)
☐ Repayment plan
☐ Forbearance
☐ Partial claim / Deferral
☐ Short sale
☐ Deed-in-lieu

Maryland-Specific Programs:
☐ Maryland Homeowner Assistance Fund (HAF)
☐ Maryland HOPE Initiative

Dual-tracking is prohibited under § 1024.41(g) and is grounds to stay the sale under Md. Rule 14-211.

Enclosed:
☐ Form 710 (or equivalent)
☐ IRS Form 4506-C
☐ 2 months pay stubs / P&L
☐ 2 years tax returns
☐ 2 months bank statements
☐ Hardship letter
☐ Monthly budget
☐ Award letters
☐ Utility bill (occupancy)

Hardship Letter

I, [_______________], am the borrower on Loan No. [_______________] for the Property at [_______________]. I am requesting loss mitigation because of [hardship]. I intend to ☐ retain ☐ vacate. I request [modification / forbearance / short sale / deed-in-lieu]. My documented monthly gross income is $[________]; I can afford monthly payments of approximately $[________].

_______________________________
[Borrower]

PART 7 — LOAN MODIFICATION REQUEST

[Date]

[Servicer Loss Mitigation]

Re: Formal Loan Modification Request — Loan No. [_______________]

Borrower requests permanent modification with the following terms:

Borrower's verified gross monthly income: $[________]. Target front-end DTI: [____]%.

Pursuant to 12 C.F.R. § 1024.41(c), Borrower requests written decision within 30 days.

_______________________________
[Borrower / Counsel]

PART 8 — RESPA NOTICE OF ERROR AND REQUEST FOR INFORMATION

[Date]
[Servicer — RESPA Designated Address]

NOTICE OF ERROR AND REQUEST FOR INFORMATION under 12 C.F.R. §§ 1024.35 and 1024.36.

Errors:
☐ Wrongful default / wrongful acceleration;
☐ Failure to credit payments;
☐ Improper fees, force-placed insurance, BPO, inspection;
☐ Dual-tracking foreclosure;
☐ Failure to evaluate loss-mitigation application;
☐ Inaccurate payoff / reinstatement quote;
☐ Other: [_______________].

Information Requested:

1. Complete payment / transaction history;
2. Owner / assignee identity (15 U.S.C. § 1641(f)(2));
3. Master and subservicers;
4. Note and all indorsements;
5. All recorded Assignments and Deeds of Appointment of Substitute Trustees;
6. Loss-mitigation evaluations;
7. Force-placed insurance documentation;
8. Escrow statements since origination;
9. Internal communications regarding foreclosure referral.

Acknowledge within 5 business days; respond within 30 business days.

_______________________________
[Borrower / Counsel]

PART 9 — DISCOVERY DEMAND

Interrogatories

1. Identify every entity that has held the Note from origination.
2. Identify the present owner of the Note and beneficial owner of the Deed of Trust.
3. Identify all servicers, subservicers, and default vendors.
4. Provide complete life-of-loan payment history.
5. Identify each loss-mitigation application and disposition.
6. State the date and basis of the foreclosure referral.
7. Identify all live-contact attempts under 12 C.F.R. § 1024.39.
8. Identify force-placed insurance policies and premiums.
9. Identify property inspections and BPOs charged.
10. Describe pre-NOI default analysis under RP § 7-105.1.

Requests for Production

1. Original Note (and allonges) for inspection;
2. Recorded Mortgage / Deed of Trust and all Assignments and Deeds of Appointment of Substitute Trustees;
3. Life-of-loan transaction history;
4. Loss-mitigation files;
5. RESPA correspondence and responses;
6. Collection notes / call logs;
7. Servicing guidelines (PSA, Fannie/Freddie/HUD/VA);
8. Affidavits filed in any prior proceeding for this loan;
9. Force-placed insurance documents and CPI vendor contracts;
10. Newspaper publication tear sheets;
11. NOI mailing records and certified-mail receipts.

Requests for Admission

1. Admit Plaintiffs were not in physical possession of the Note when the Order to Docket was filed.
2. Admit the NOI was not mailed at least 45 days before filing.
3. Admit the loss-mitigation application form was not enclosed with the NOI.
4. Admit a final loss-mitigation determination has not issued for Borrower's pending complete application.
5. Admit no live-contact early intervention was attempted within 36 days of delinquency.
6. Admit Plaintiffs dual-tracked the foreclosure.

PART 10 — RATIFICATION OF SALE — EXCEPTIONS (Md. Rule 14-305)

If a sale occurs, file written EXCEPTIONS within 30 days after the report of sale is filed, addressing:

• Defects in advertisement (RP § 7-105.1(o));
• Defects in notice of sale (Md. Rule 14-210);
• Chilled bidding / inadequate sale price;
• Failure to comply with Rule 14-209.1 / loss-mitigation requirements;
• Other procedural irregularities.

PART 11 — BANKRUPTCY REFERRAL

When to refer:
☐ Sale is imminent; Rule 14-211 motion denied or untimely;
☐ Borrower has stable income for Ch. 13 cure plan;
☐ Strip-down of junior liens potentially available;
☐ Co-debtor relief (11 U.S.C. § 1301) needed.

Information needed:
☐ 6 months pay stubs; 2 years tax returns
☐ Creditor list / balances
☐ Real estate values, vehicle equity
☐ Sale date and Substitute Trustees' contact
☐ Credit counseling certificate (§ 109(h))
☐ Prior bankruptcy filings (assess § 362(c)(3) extension)

Filing imposes automatic stay (11 U.S.C. § 362). Notify Substitute Trustees, foreclosure law firm, and Circuit Court Clerk immediately. File Ch. 13 plan curing arrears over 60 months (§ 1322(b)(5)).

SOURCES AND REFERENCES

• Md. Code, Real Property §§ 7-105, 7-105.1, 7-105.2, 7-105.6
• Md. Rules 14-202 to 14-218; specifically Rule 14-207, 14-209.1, 14-210, 14-211, 14-305
• COMAR 09.03.12 (Commissioner of Financial Regulation foreclosure regulations)
• 12 C.F.R. Part 1024 (Reg X)
• 15 U.S.C. §§ 1641(f)(2), 1681 et seq., 1692 et seq.
• 11 U.S.C. §§ 362, 506, 1322, 1328
• Md. Code, Comm. Law §§ 13-301 et seq., 14-201 et seq.
• Bates v. Cohn, 417 Md. 309 (2010); Svrcek v. Rosenberg, 203 Md. App. 705 (2012); Andrews & Lawrence Prof'l Servs., LLC v. Mills, 467 Md. 126 (2020)
• Maryland Office of Administrative Hearings — Foreclosure Mediation Unit
• Maryland Homeowner Assistance Fund (HAF)

LEGAL DISCLAIMER: Not legal advice. Maryland foreclosure procedure is rule-driven and motion deadlines are short. Engage a licensed Maryland attorney.