July 14, 2008

ONE HUNDRED FIFTY-NINTH REPORT

OF THE

STANDING COMMITTEE ON RULES

OF PRACTICE AND PROCEDURE

The Honorable Robert M. Bell,

Chief Judge

The Honorable Glenn T. Harrell, Jr.

The Honorable Lynne A. Battaglia

The Honorable Clayton Greene, Jr.

The Honorable Joseph F. Murphy, Jr.,

The Honorable Sally D. Adkins,

Judges

The Court of Appeals of Maryland

Robert C. Murphy Courts of Appeal Building

Annapolis, Maryland 21401

Your Honors:

The Rules Committee submits this, its One Hundred Fifty-
Ninth Report, and recommends that the Court adopt, on an emergency basis, the proposed amendments to Rules 2-122, 14-201, 14-203, 14-204, and 14-205 transmitted with this Report.

The proposed amendments are designed primarily to conform the Rules relating to the foreclosure of mortgages and deeds of trust against residential real property to legislation enacted in the 2008 Session of the General Assembly, principally 2008 Md. Laws, Ch. 2 (HB 365), which took effect as an emergency bill on April 4, 2008. A copy of that Act is attached as an Appendix to this Report. For convenience, this Report uses the term "mortgage" and "mortgagor" as including deeds of trust and grantors of deeds of trust.

Because foreclosure proceedings are specialized, somewhat technical in nature, and foreign to many lawyers and judges, it may be helpful to provide some context to both the legislation, the proposed Rules changes, and impending further study by the Rules Committee.

Foreclosure proceedings have been regarded as in rem proceedings; the action is against the property, not the mortgagor or the property owner (who are usually, but not always, the same). In mortgages containing a power of sale, which most do, the proceeding is commenced and proceeds on an "Order to Docket." If the mortgage does not contain a power of sale but contains an assent to a foreclosure decree, the proceeding is commenced with a complaint to foreclose, but, because of the assent, no process issues against the mortgagor/owner. Only where there is neither a power of sale nor an assent to a foreclosure decree does process issue and the case proceed as a normal civil action.

Although due process requires that a reasonable attempt be made to notify the property owner of the proceeding, in the vast majority of cases, where there is either a power of sale or an assent to a foreclosure decree, no process issues against the mortgagor or owner, and they are ordinarily not parties to the foreclosure proceeding. The proceeding – particularly the sale of the property – usually proceeds with much greater expedition than normal civil actions involving a like amount of money, and, given the speed at which the action proceeds and some ambiguity regarding the amount of any bond that may need to be posted, the practical ability of the mortgagor/owner, in the foreclosure proceeding, to raise defenses to the validity of the mortgage or the right of the lender to foreclose is limited. The Court recently dealt with some of these issues in Griffin v. Bierman, 403 Md. 186 (2008) and Wells Fargo v. Neal, 398 Md. 705 (2007).

Chapter 2 – one of several bills enacted to deal with the dramatic increase in foreclosures against residential property, unprecedented since the Great Depression and estimated to reach 50,000 in Maryland – imposes several new requirements on plaintiffs seeking to foreclose on residential property, including:

(1) A requirement that, at least 45 days before filing a foreclosure action, written notice of an intent to foreclose is sent to the mortgagor/owner by first class and certified mail. The notice must contain certain information, including the amount required to cure the default and the name and telephone number of an agent of the secured party who is authorized to modify the terms of the loan.

(2) A waiting period on the filing of a foreclosure action. Such an action may not be filed until the later of 90 days after a default allowing for a foreclosure or 45 days after the notice of intent to foreclose is sent to the mortgagor/owner, unless the court, on petition, which may be ruled upon without a hearing, concludes that (i) the loan was procured by fraud or deception, (ii) no payments have ever been made on the loan, (iii) the property has been destroyed, or (iv) the default occurred after a bankruptcy stay was lifted. It is not clear from the statute whether this petition, which seeks to excuse both the requirement of the 45-day notice of intent and the 90-
day waiting period, is an ex parte one, whether it must be served on the mortgagor/owner, if required to be served, how service is to be effected, or how or within what period the mortgagor/owner may contest the petition.

(3) An order to docket or a compliant to foreclose must include an affidavit stating the date of default and the date on which the notice of intent was sent and must be accompanied by certain other documents and affidavits, including a notice advising that the owner may stop the sale by paying all amounts due on the loan plus all accumulated fees and costs.

(4) The order to docket or complaint, along with all other papers filed with it, must be served on the mortgagor by personally delivering them to the mortgagor or by leaving them with a resident of suitable age at the mortgagor's home. If a good faith attempt to effect such service on two different days proves unsuccessful, service may be effected on the mortgagor by posting the property and by first class and certified mail.

(5) A sale may not occur until at least 45 days after service is made. The sale must be advertised at least once a week for three consecutive weeks.

(6) Finally, the mortgagor has the right to cure a default and reinstate the loan by paying all past due payments, penalties, and fees any time up to one business day before the sale.

The Rules Committee proposes that the Rules governing foreclosures against residential property be conformed to these, and other, statutory provisions in the following manner:

(1) Amend Rule 14-201, which defines terms used in the Title 14 Rules, to add a definition of "residential property." The definition is identical to that contained in Chapter 2 (Code, Real Property Article, §7-105.1 (a)).

(2) Amend Rule 14-203, which provides certain conditions precedent to the filing of foreclosure actions, to add a new subsection (a)(3). The new subsection repeats the conditions set forth in Chapter 2 (Code, Real Property Article, §7-105.1 (c)) – the requirement of the notice of intent to foreclose (subsection (a)(3)(B)) and the 90 day/45 day waiting period before an order to docket or complaint may be filed (subsection (a)(3)(A)).

(3) Amend Rule 14-204, dealing with the commencement of a foreclosure action, as follows:

(i) Amend subsection (a)(4) to cross-reference the Federal Servicemembers Civil Relief Act, which supplanted the former Soldiers' and Sailors' Civil Relief Act;

(ii) Add a new subsection (a)(5) to require that an order to docket or complaint to foreclose against residential property contain the information and papers required by Chapter 2 (Code, Real Property Article, §7-105.1 (d));

(iii) Repeal existing section (b), which tracks the requirements of a statute repealed by Chapter 2, and add a new subsection (b)(1) and (b)(2) to provide for the method of service required by Chapter 2 – personal delivery (subsection (b)(1)) or, failing two good faith attempts at personal delivery, posting the property and notice by first class and certified mail (subsection (b)(2)). The Rules Committee agreed with the recommendation of representatives of creditors that the process would be made more efficient by providing that the alternative service is complete when the property is posted and the mailings have been made as required – that the creditor need not wait for the return of a "green card" with respect to certified mail. In that regard, the Rules Committee notes that it is possible for the foreclosing party to determine, on line, whether the certified mail was delivered and, if so, to whom.

(iv) Add a new subsection (b)(3) to provide a method of proof of service, which must be filed promptly and, in any event, prior to the date of sale. Chapter 2 (Code, Real Property Article, §7-105.1 (e)(3)) provides that proof of service shall be in accordance with the Maryland Rules. New subsection (b)(3) implements that provision.

(4) Amend Rule 14-205, which deals with actions to foreclose a lien instrument or statutory lien that contains neither a power of sale nor an assent to a foreclosure decree. The Rules Committee is advised that there are very few lien instruments of that kind, but where that circumstance exists, the action

proceeds like any other civil action. Section (b), dealing with notice in foreclosures of residential property, references a statute repealed by Chapter 2, and is therefore repealed as obsolete. Section (a) is amended to add the requirement that service in foreclosures of residential property must be in accordance with Rule 14-204 (and thus with Chapter 2).

(5) Amend Rule 2-122, the general Rule dealing with service of process in in rem actions, to permit the posting of property to be done by any person authorized to serve process in accordance with Rule 2-123 (a) (the sheriff or any competent private person, 18 years of age or older, including an attorney of record but not a party to the action), and not just by the sheriff. The Rules Committee saw no need to limit the posting or property to the sheriff.

For the further guidance of the Court and the public, following the proposed amendments to each Rule is a Reporter's Note describing in further detail the reasons for the proposal and any changes that would be effected in current law or practice. We caution that the Reporter's Notes were prepared initially for the benefit of the Rules Committee. They are not part of the Rules, have not been debated or approved by the Committee, and are not to be regarded as any kind of official comment or interpretation. They are included solely to assist the Court in understanding some of the reasons for the proposed changes.

Although these Rules are submitted for adoption as emergency Rules, notice of this Report has been placed on the Judiciary's web site, copies have been sent to every person who consulted with the Rules Committee's Property Subcommittee or who attended the full Rules Committee meeting on this subject on June 27, 2008, and an effort will be made to place notice in the Daily Record.

Finally, it appears to several members of the Rules Committee, in light of information supplied to the General Assembly or reported in the responsible media and government documents, that the Rules governing foreclosure, at least with respect to residential property, need to be more widely examined. They have not been comprehensively reviewed for decades. To that end, a special subcommittee has been appointed; it will have its first meeting on July 21, 2008. The subcommittee will attempt to

work with all interested persons and groups in determining whether the structure of and procedures in foreclosure actions should be changed beyond what is required by Chapter 2.

Respectfully submitted,

Alan M. Wilner

Chair

Linda M. Schuett

Vice Chair

AMW/LMS:cdc

MARYLAND RULES OF PROCEDURE

TITLE 14 - SALES OF PROPERTY

CHAPTER 200 - FORECLOSURE OF LIEN INSTRUMENTS

AMEND Rule 14-201 to add a definition of "residential

property," as follows:

Rule 14-201. SCOPE AND DEFINITIONS

(a) Scope

The rules in this Chapter apply to foreclosure of liens upon property that are created or authorized to be created by a lien instrument or are created by a statute providing for foreclosure in the manner specified for foreclosure of mortgages. The procedure set forth in these Rules shall provide the sole remedy for the vendor for repossession of property sold under a land installment contract executed pursuant to Code, Real Property Article, Title 10, Subtitle 1 or its statutory predecessor. Otherwise, the foreclosure procedure provided in these Rules does not preclude other remedies, including but not limited to self-help, that may be available under Code, Commercial Law Article; Code, Real Property Article; or other law.

(b) Definitions

The following definitions apply in the rules in this Chapter:

(1) Assent to a Decree

"Assent to a decree" means a provision in a lien instrument declaring an assent to the entry of an order for the sale of the property subject to the lien upon a specified default.

(2) Debt

"Debt" means a monetary obligation secured by a lien.

(3) Debtor

"Debtor" means the record owner of the property at the time the lien was created and the purchaser under a land installment contract.

(4) Lien

"Lien" means a statutory lien or a lien upon property created or authorized to be created by a lien instrument.

(5) Lien Instrument

"Lien instrument" means a mortgage, a deed of trust, a land installment contract, including those defined in Code, Real Property Article §10-101 (b), a contract creating a lien pursuant to Code, Real Property Article, §§14-201 through 14-205, a deed or other instrument reserving a vendor's lien, an instrument creating or authorizing the creation of a lien in favor of a homeowners' association, a condominium council of unit owners, a property owners' association or a community association, a security agreement, and any other instrument creating or authorizing the creation of a lien upon the property.

(6) Power of Sale

"Power of sale" means a provision in a lien instrument authorizing a person to sell the property upon a specified default.

(7) Property

"Property" means real and personal property of any kind situated within this State.

(8) Record Owner of Property

"Record owner of property" includes the record holder of the rights of a purchaser under a land installment contract.

(9) Residential Property

"Residential property" means real property improved by four or fewer single family dwelling units.

Cross reference: See Code, Real Property Article, §7-105.1 (a)

(10) Sale

"Sale" means foreclosure sale.

(11) Secured Party

"Secured party" means a mortgagee, the holder of a note secured by a deed of trust, a vendor holding a vendor's lien, a condominium council of unit owners, a homeowners' association, a property owners' or community association, and any other party secured by a lien. "Secured party" includes any assignee or successor in interest of a secured party.

(12) Statutory Lien

"Statutory lien" means a lien on property created by a statute providing for foreclosure in the manner specified for the foreclosure of mortgages.

Source: This Rule is derived as follows:

Section (a) is derived from former Rules W70 b and W79 c.

Section (b) is in part derived from former Rule W70 a and in part new.

REPORTER'S NOTE

The 2008 legislature enacted a series of bills designed to address the foreclosure crisis in Maryland by changing the procedures for foreclosing on residential property. The Rules Committee recommends adding to Rule 14-201 the definition of "residential property" that is in section (a) of Code, Real Property Article, §7-105.1, the new law added by the legislature in House Bill 365 (Chapter 2), Acts of 2008.

MARYLAND RULES OF PROCEDURE

TITLE 14 - SALES OF PROPERTY

CHAPTER 200 - FORECLOSURE OF LIEN INSTRUMENTS

AMEND Rule 14-203 to add a new subsection (a)(3) pertaining

to the requirement to send a notice of intent to foreclose a

mortgage or deed of trust on residential property and to add

a cross reference after subsection (a)(3), as follows:

Rule 14-203. CONDITIONS PRECEDENT; VENUE

(a) Conditions Precedent

(1) Generally

An action to foreclose a lien may be filed after (A) the instrument creating or giving notice of the existence of the lien has been filed for record, and (B) there has been a default in a condition upon which the lien instrument provides that a sale may be made or there is a default in the payment of the debt secured by a statutory lien.

Cross reference: Code, Real Property Article, §§14-201 through 14-206.

(2) Land Installment Contract

An action to foreclose a land installment contract as defined in Code, Real Property Article, §10-101 (b) shall be instituted only after the secured party: (A) serves on the debtor and the current record owner of the property, either by delivery to the person to be served or by certified mail to the last known address of the person to be served, a written notice stating the amount of payment in default and the nature of any claimed default in any other condition or requirement of the contract, and advising the person served that foreclosure proceedings will be instituted on or after a designated day, not less than 30 days after service of the notice, unless the debtor or the current record owner before that time cures the default, and (B) files proof by affidavit that the required notice has been given.

(3) Foreclosure on Residential Property

(A) An action to foreclose on residential property may not be filed until the later of 90 days after the default or 45 days after the sending of the notice of intent to foreclose required by subsection (a)(3)(B) of this Rule.

(B) At least 45 days before the filing of an action to foreclose a mortgage or a deed of trust on residential property, the secured party shall send a written notice of intent to foreclose to the mortgagor or grantor and to the record owner of the property in conformance with Code, Real Property Article, §7-105.1 (c), except that the action may be filed without sending the notice if:

(i) the loan secured by the mortgage or deed of trust was obtained by fraud or deception,

(ii) no payments have ever been made on the loan secured by the mortgage or deed of trust,

(iii) the property subject to the mortgage or deed of trust has been destroyed, or

(iv) the default occurred after a stay has been lifted in a bankruptcy hearing.

Cross reference: For the form of the notice and any other information that the Commissioner of Financial Regulation requires, see COMAR 09.03.11.01 et seq.

(b) Venue

An action to foreclose a lien shall be filed in the county in which all or any part of the property subject to the lien is located.

(c) Jurisdiction - Attaches Upon Commencement of Action

The jurisdiction of the court over property subject to a lien shall attach upon the commencement of an action filed pursuant to Rule 14-204, with or without the bond described in Rule 14-206 (a).

Source: This Rule is derived from former Rule W72 and W79.

REPORTER'S NOTE

House Bill 365, (Chapter 2), Acts of 2008, one of the bills enacted to address the foreclosure crisis in Maryland, requires that the secured party send to the mortgagor or grantor and to the record owner a written notice of intent to foreclose a mortgage or deed of trust on residential property. This is set out in Code, Real Property Article, §7-105.1 (c). Four exceptions to this requirement are set out in Code, Real Property Article, §7-105.1 (b)(2). The Rules Committee recommends adding to the list of conditions precedent in Rule 14-203 a reference to the requirement of filing a notice of intent to foreclose qualified by a reference to the exceptions to the requirement.

MARYLAND RULES OF PROCEDURE

TITLE 14 - SALES OF PROPERTY

CHAPTER 200 - FORECLOSURE OF LIEN INSTRUMENTS

AMEND Rule 14-204 to add a provision to section (a)

stating that certain items be included and that certain items

need not be included in the complaint to foreclose or order to

docket, to delete section (b), to add a new section (b)

setting out procedures for service in foreclosures on residential

property, to add language to section (c) that refers to

residential property foreclosures, and to correct two references

to federal law, as follows:

Rule 14-204. COMMENCEMENT OF ACTION AND PROCESS

(a) Methods of Commencing Action

An action to foreclose a lien pursuant to a power of sale shall be commenced by filing an order to docket. An action to foreclose a lien pursuant to an assent to a decree or where the lien instrument contains neither a power of sale nor an assent to a decree shall be commenced by filing a complaint to foreclose. When a lien instrument contains both a power of sale and an assent to a decree, the lien may be foreclosed pursuant to either the power of sale or the assent to a decree. The complaint or order to docket shall be accompanied by:

(1) the original or a certified copy of the lien instrument or, in an action to foreclose a statutory lien, an original or a certified copy of a notice of the existence of the lien,

(2) a statement of the debt remaining due and payable supported by an affidavit of the plaintiff or the secured party or the agent or attorney of the plaintiff or the secured party,

(3) in the case of a deed of trust, a copy of the debt instrument certified by the attorney or the trustee conducting the sale,

(4) if any defendant is a natural person, an affidavit that either the person is not in the military service of the United States as defined in the Servicemembers Civil Relief Act, 50 U.S.C. app. §§501 et seq., or that the action is authorized by the Act, and

(5) in an action to foreclose a mortgage or deed of trust on residential property, the information and papers required by Code, Real Property Article, §7-105.1 (d), except that if the name and license number of the mortgage originator and mortgage lender is not required in the notice of intent to foreclose, the information is not required in the order to docket or complaint to foreclose.

(b) Service in Residential Property Foreclosures

(1) Service by Personal Delivery

When an order to docket or a complaint to foreclose a lien instrument or statutory lien on residential property is filed, a copy of the order to docket or complaint to foreclose and the accompanying papers shall be served by personal delivery to the mortgagor or grantor or by leaving them with a resident of suitable age and discretion at the dwelling house or usual place of abode of the mortgagor or grantor.

(2) Service by Mailing and Posting

If on at least two different days a good faith effort was made to serve the mortgagor or grantor under subsection (b)(1) of this Rule and service was not successful, the plaintiff may effect service by (A) mailing a copy of the order to docket or complaint to foreclose and accompanying papers by certified mail, return receipt requested, and first-class mail to the last known address of the mortgagor or grantor and, if different, to the address of the residential property subject to the mortgage or deed of trust; and (B) posting a copy of the order to docket or complaint to foreclose and accompanying papers in a conspicuous place on the residential property subject to the mortgage or deed of trust. Service is complete when the property has been posted and the mailings have been made in accordance with this subsection.

(3) Affidavit of Service

(A) Time for Filing

An affidavit of service shall be filed promptly and in any event before the date of the sale.

(B) If Service by an Individual Other than a Sheriff

In addition to the requirements of subsection (b)(3)(C) or (D) of this Rule, if service is made by an individual other than a sheriff, the affidavit shall include the name, address, and telephone number of the affiant and a statement that the affiant is 18 years of age or older.

(C) Contents of Affidavit of Personal Delivery

If service is effected pursuant to subsection (b)(1) of this Rule, the affidavit shall set forth the name of the person served and the date and particular place of service. If delivery is to a person other than the mortgagor or grantor, the affidavit also shall include a description of the individual served and the facts upon which the individual making service concluded that the individual served is of suitable age and discretion.

(D) Contents of Affidavit of Service by Mailing and Posting

If service is effected pursuant to subsection (b)(2) of this Rule, the affidavit shall (i) describe with particularity the good faith efforts to serve the mortgagor or grantor by personal delivery; (ii) state the date on which the required papers were mailed by first-class and certified mail, return receipt requested, and the name and address of the addressee; and (iii) include the date of the posting and a description of the location of the posting on the property. If available, the original certified mail return receipt shall be attached to the affidavit.

(c) Process and Hearing Not Required

In an action to foreclose a lien pursuant to a power of sale or pursuant to an order for sale under an assent to a decree, including a foreclosure on residential property, it is not necessary that process issue or that a hearing be held prior to sale.

Cross reference: See the Servicemembers Civil Relief Act, 50 U.S.C. app. §§501 et seq.

Source: This Rule is derived in part from former Rule W72 c, d, and e and is in part new.

REPORTER'S NOTE

House Bill 365 (Chapter 2), Acts of 2008, sets out in Code, Real Property Article, §7-105.1 (d) the procedure for filing an order to docket or a complaint to foreclose a mortgage or deed of trust on residential property. The Rules Committee recommends repeating much of the statutory procedure in Rule

14-204.

The Committee recommends the addition of subsection (a)(5) because section (d) of Code, Real Property Article, §7-105.1 requires certain information and papers to be filed with an order to docket or a complaint to foreclose a mortgage or deed of trust on residential property. Subsection (c)(4) of the statute provides that the notice of intent to foreclose required by subsection (c)(1) of the statute to be sent to the mortgagor or grantor and the record owner shall be in the form that the Commissioner of Financial Regulation prescribes. Under certain circumstances, the name and license number of the mortgage originator are not required on the notice of intent to foreclose. The Committee believes that if this information is not required on the notice, it should not be required on the order to docket or complaint to foreclose. The Committee has added language to this effect in subsection (a)(5).

The Committee suggests deleting existing section (b) because the statute referenced there has been superseded by Code, Real Property Article, §7-105.1.

Code, Real Property Article, §7-105.1 (e) sets out procedures for serving a copy of the order to docket or complaint to foreclose on residential property. Section (b) of the Rule is added to reflect these procedures.

Subsection (b)(1) providing for service in personam is taken directly from subsection (e)(1) of the statute.

Subsection (b)(2) providing for service in rem is taken directly from Code, Real Property Article, §7-105.1 (e)(2), except that the last sentence was added to indicate that completion of service is not dependent upon the return of the return receipt, which shows that certified mail service was effected, to the person who requested the certified mail service. The affidavit requirement of §7-105.1 (e)(2)(i) of the statute has been incorporated into subsection (b)(3)(D) of the Rule.

Code, Real Property Article, §7-105.1 (e)(3) provides that the individual making service shall file proof of service with the court in accordance with the Maryland Rules. The Committee recommends the addition of subsection (b)(3) to the Rule to provide a procedure for proof of service. Subsection (b)(3)(A) is derived from Rule 2-126 (a) providing a time for filing the affidavit of service. Subsection (b)(3)(B) is derived from Rule 2-126 (a)(2). Subsection (b)(3)(C) is derived from Rule 2-126 (a)(1). Subsection (b)(3)(D) is in part derived from Code, Real Property Article, §7-105.1 (e)(2)(i) and is in part new. It provides a procedure for proving that the requirements of subsection (b)(2) of the Rule have been met.

Section (c) contains language added by the Committee to make clear that it is not necessary that process issue or that a hearing be held prior to the sale when residential property is being foreclosed pursuant to a power of sale or an order for sale under an assent to a decree.

References to the former Soldiers' and Sailors' Civil Relief Act of 1940 in subsection (a)(4) of the Rule and a cross reference at the end of the Rule are corrected to refer to the current Servicemembers Civil Relief Act.

MARYLAND RULES OF PROCEDURE

TITLE 14 - SALES OF PROPERTY

CHAPTER 200 - FORECLOSURE OF LIEN INSTRUMENTS

AMEND Rule 14-205 to require that service in residential

property foreclosures be in accordance with Rule 14-204 (b) and

to delete section (b), as follows:

Rule 14-205. LIEN INSTRUMENTS OR STATUTORY LIENS - CONTAINING

NEITHER POWER OF SALE NOR ASSENT TO DECREE

(a) Commencement of Action and Process

When a complaint to foreclose a lien instrument or statutory lien containing neither a power of sale nor an assent to a decree is filed, process shall issue and be served and the action shall proceed as in any other civil action, except that service in residential property foreclosures shall be in accordance with Rule 14-204 (b).

(b) Order of Court Directing Sale - Conditions

(1) Generally

In an action to foreclose a lien instrument or statutory lien containing neither a power of sale nor an assent to a

decree, the court shall first determine whether a default has occurred. If the court finds that a default has occurred it shall (A) fix the amount of the debt, interest, and costs then due and (B) provide a reasonable time within which payment may be made. The court may order that if payment is not made within the time fixed in the order, so much of the property as may be necessary to satisfy the amount due shall be sold.

(2) Order Directing Sale Before Judgment in Exceptional Case

If after a hearing the court is satisfied that the interests of justice require an immediate sale of the property that is subject to the lien, and that a sale would be ordered as a result of the final hearing of the action, the court may order a sale of the property before judgment and shall appoint a person to make the sale pursuant to Rule 14-207. The court shall order the proceeds of any sale before judgment to be deposited or invested pending distribution pursuant to judgment.

Source: This Rule is derived from former Rule W73.

REPORTER'S NOTE

Because Code, Real Property Article, §7-105.1 (e) provides service procedures that are different for foreclosures of residential property than for other types of property and new section (b) of Rule 14-204 sets forth those procedures in detail, the Rules Committee recommends adding to Rule 14-205 (a) the requirement that service in residential property foreclosures be in accordance with Rule 14-204 (b).

The Committee suggests deleting section (b) of the Rule because the statute to which it refers has been superseded by Code, Real Property Article, §7-105.1.

MARYLAND RULES OF PROCEDURE

TITLE 2 - CIVIL PROCEDURE--CIRCUIT COURT

CHAPTER 100 - COMMENCEMENT OF ACTION AND PROCESS

AMEND Rule 2-122 by deleting language referring to posting

by "the sheriff" from and adding language referring to "a person

authorized to serve process" to subsection (a)(3), as follows:

Rule 2-122. PROCESS - SERVICE - IN REM OR QUASI IN REM

(a) Service by Posting or Publication

In an in rem or quasi in rem action when the plaintiff has shown by affidavit that the whereabouts of the defendant are unknown and that reasonable efforts have been made in good faith to locate the defendant, the court may order service by the mailing of a notice to the defendant's last known address and:

(1) by the posting of the notice by the sheriff at the courthouse door or on a bulletin board within its immediate vicinity, or

(2) by publishing the notice at least once a week in each of three successive weeks in one or more newspapers of general circulation published in the county in which the action is pending, or

(3) in an action in which the rights relating to land including leasehold interests are involved, by the posting of the notice by a person authorized to serve process in accordance with Rule 2-123 (a) in a conspicuous place on the land.

Additionally, the court may order any other means of notice that it deems appropriate in the circumstances.

(b) Time

The mailing and the posting or publication shall be accomplished at least 30 days before the date by which a response to the complaint is to be filed.

(c) Content of Notice

The notice shall be signed by the clerk and shall include the caption of the case; describe the substance of the complaint and the relief sought; inform the defendant of the latest date by which the response is to be filed; warn the defendant that failure to file the response within the time allowed may result in a judgment by default or the granting of the relief sought; and contain any other information required by the court.

Source: This Rule is derived as follows:

Section (a) is derived from former Rules 105 b and 111 a.

Section (b) is derived from former Rule 105 b 2.

Section (c) is new and replaces former Rule 105 b 1 (a).

REPORTER'S NOTE

The Rules Committee recommends adding to subsection (a)(3) a reference to "a person authorized to serve process in accordance with Rule 2-123 (a)," which would permit a competent private person, 18 years of age of older, including an attorney of record, but not a party to the action, to post the required notice. This would make posting procedures more efficient. The Committee recommends deleting the language referring to posting by the sheriff in subsection (a)(3), because the sheriff is included in Rule 2-123 (a) as a "person authorized to serve process."

See appendix, Chapter 2, (HB 365) in PDF