Foreclosure of Residential Property – Certified Community Development Financial Institutions: Summary of Bill Passed by the 2013 Maryland General Assembly

J. Paul Rieger, Jr. of First American Title Insurance Company has provided a Summary of Select Legislation Passed by the 2014 Maryland General Assembly that is available on the Real Property Section’s web site under “Section Documents.” His summary of Chapter 233 (HB 595) amending Real Property Art. 7-105.1 and 7-302 and Tax-Property Art. 12-108(ff) and 13-207(a)(22), (23), and (24) is below:

Community development financial institutions (CDFIs) provide financial products and services in economically distressed target markets, such as providing mortgage financing for low-income and first-time homebuyers and not-for-profit developers. CDFIs are certified by the Community Development Financial Institutions Fund within the U.S. Treasury. This bill authorizes a certified CDFI to buy an owner-occupied residential property from a lender before the lender forecloses and then subsequently transfer the property back to the immediately preceding homeowner. The bill prohibits a person from requiring, as a condition of a sale or transfer of owner-occupied residential property to a certified CDFI, any affidavit, statement, agreement, or addendum that limits ownership or occupancy of the property by the immediately preceding mortgagor or grantor. The bill also exempts a certified CDFI that purchase owner-occupied residential property from the requirements of the Protecting Homeowners in Foreclosure Act. Finally, the bill provides exemptions to the recordation tax and State transfer tax for an instrument of writing that transfers title from a certified CDFI to the immediately preceding mortgagor or grantor of the property.

An emergency bill – became effective upon approval by the Governor on April 14, 2014.

**EDITOR’S NOTE: As an update, earlier this year we posted an article (available here) about legislation that proposed an emergency 6 month prohibition on residential foreclosures. The proposed legislation (SB755) was not passed during the 2014 General Assembly session.

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