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2. 2 William M. LeRoy - Moderator President & CEO American Legal & Financial Network “ALFN” Jeffrey B. Fisher, Esq. - Panelist Founder & Member The Fisher Law Group, PLLC Denise D. Griffin, Esq. - Panelist Managing Attorney, Foreclosure & Title Shapiro & Kirsch, LLP Sharon Fewell, Esq. - Panelist Managing Attorney Shapiro & Kirsch, LLP

3.  Governor signed bill on May 20  Bill is effective July 1, 2010  Statute is intended to apply only to “ owner-occupied ” residential property but procedurally affects all residential foreclosures  Emergency Regulations by CFR should become final this week  Final regs must go through COMAR process  CFR made serious collaborative effort to cover all bases in emergency regulations  Changes to court rules were adopted by Court of Appeals and will also take effect on July 1, 2010  Different effective date language from normal rules adoption  This Program will not include the mediation itself. Subject is how to be up and running on July 1 and how to docket a case and schedule a sale 3

4.  On May 5, CFR issued advisory stating that NOI ’ s issued under former law would be valid for new cases docketed after July 1 under the new law  While it makes sense to rely on this, it is an ADVISORY and should not be expected to be uncontested or universally accepted by all judges  Practice Pointer: Since old NOI lacks many disclosures required by new NOI, servicers may decide to commence cases like this after July 1 with a Preliminary Loss Mitigation Affidavit, even if circumstances exist for filing a Final Loss Mitigation Affidavit 4

5.  Changes to NOI (the form itself) RP 7-105.1(c) (4)  NEW: statement recommending that the mortgagor seek housing counseling services.  NEW: telephone numbers and internet addresses of “ nonprofit and state government resources available to assist mortgagors... facing foreclosure... ”  NEW: “ explanation of the Maryland foreclosure process and the time line.”  Breach letter language may now be included in NOI  Provides new option to servicers to cut time line. 5

6.  NEW RP 7-105.1(c) (5): The NOI Package must contain:  A loss mitigation application for loss mitigation programs that are applicable to the loan.  Instructions for completing the app and a telephone number to call to confirm receipt of the app.  Description of the eligibility requirements for the loss mitigation programs offered by the secured party that may be applicable to the loan.  envelope preprinted with the address of the person responsible for conducting loss mitigation analysis for the loan. 6

7.  As to NOI requirement of “the description of the eligibility requirements for the loss mitigation programs offered by the secured party that may be applicable to the loan secured by the mortgage or deed of trust that is the subject of the foreclosure action”, this is very technical and specific language.  Statutory definitions of loss mitigation do not just include home retention options. They include deeds in lieu and short sales.  You need to adapt or create a form that is general enough to be used routinely (so that we are not creating a custom disclosure for each case) and specific enough to withstand an attack from a consumer lawyer that the disclosure is not complete.  Your attorney will give you all of the help they can. However, while we know the types of programs there are, outside of HAMP, we do not know the complete breadth of your programs or of the eligibility requirements within your pools that you are servicing. 7

8.  There is a bright side here for HAMP eligible loans or loans in related programs. We really fought for this and were very happy to have succeeded. Both the regulations and the court rules provide as follows:  “if the mortgage loan is owned, securitized, insured or guaranteed by the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, or Federal Housing Administration, or if the servicing agent is participating in the federal Making Home Affordable Modification Program (also know as “HAMP”), providing documentation to the borrowers as required by those programs satisfies the requirement to provide a description of the eligibility requirement for the applicable loss mitigation program” 8

9.  As far as we can tell, this means exactly what it says. So if you provide what is required under HAMP or by your GSE, or by FHA or VA, for example, you have met the Maryland requirement. We need to have these forms on hand to append to the NOI when we generate it. We also need your commitment to keep providing us updates of what you change, as you change it. If you do not, the NOI’s we send will be defective. 9

10.  No change to timing before filing Order to Docket per RP 7-105.1(b)(1)  Loan must be in default 90 days and  NOI must be sent 45 days before OTD can be filed  Statutory exceptions for need to file NOI (which are almost NEVER used) remain in effect, including  House is destroyed  First payment default  Fraud  Stay previously lifted in bankruptcy 10

11.  NEW CONCEPT per RP 7-105.1(d)(2)(viii)  OTD must be accompanied by either a Preliminary or a Final Loss Mitigation Affidavit  Final Loss Mitigation Affidavit asserts that all loss mitigation analysis is complete and no loss mit is available. Inability to contact or obtain cooperation is NOT a basis for a Final Affidavit at this stage. See RP 7-105.1(e)  Preliminary Loss Mitigation Affidavit asserts that final analysis has not been completed 11

12. □ Yes □ No The mortgage loan is owned, securitized, insured, or guaranteed by FNMA, FHLMC, or FHA or the servicing agent is participating in the federal Making Home Affordable Program or in a similar loss mitigation program. The mortgage loan that is the subject of this foreclosure action may be eligible for loss mitigation and:  The loan currently is under loss mitigation analysis, but the analysis has not yet been completed.  The servicer has not received all the information from the borrower that the servicer needs to perform a loss mitigation analysis.  The servicer has had no contact with the borrower.  Other_____________________. 12

13. The mortgage loan that is the subject of this foreclosure action is not eligible for loss mitigation because:  The property is not owner-occupied (it is not the primary residence of at least one of the borrowers).  The property has more than four dwelling units.  The property is vacant or condemned.  The mortgage loan is not a first mortgage.  The amount of the mortgage loan makes it ineligible under all relevant loss mitigation programs. 13

14.  The borrower’s income makes the borrower ineligible under all relevant loss mitigation programs.  The borrower has already failed a modification trial period plan.  The loan is owned by an investor or pool of investors that prohibits the servicer from entering into any loss mitigation with the borrower (include proof, such as relevant portions of the contract).  Other (state reasons):____________.  The mortgage loan that is the subject of this foreclosure action is eligible for loan modification or loss mitigation, and loan modification or loss mitigation has been denied. The reason for the denial is as follows: ____ (attach a sheet if additional space needed). No other loss mitigation options have been identified as appropriate. 14

15.  With a Final Loss Mit Affidavit, OTD must contain the following additional material:  Request for Foreclosure Mediation in the form designed by CFR per RP 7-105.1(d)(2)(x)  Envelope preprinted with address of Court Clerk  Envelope preprinted with address of foreclosure attorney 15

16.  Per RP 7-105.1(d)(2)(viii), with Preliminary Loss Mit Affidavit, OTD must contain the following additional material:  A loss mitigation application and a description of the eligibility requirements for loss mitigation programs that are applicable to the loan.  Instructions for completing the app including direction to return completed app to foreclosure attorney  Envelope preprinted with address of attorney handling the foreclosure  Requirement of service of original papers remain unchanged 16

17.  Additional Requirements for all OTD ’ s for residential property  $300 filing fee in ADDITION to normal civil filing fee per RP 7-105.1(d)(2)(vii)  There has also been a general $30 increase in all civil filing fees for the benefit of Legal Aid so filing fee will go up by $330 to about $450  Revised Consumer Notice describing rights to mediation in addition to the information required by the prior version of the Consumer Notice 17

18.  If OTD is accompanied by Preliminary Loss Mitigation Affidavit:  Final Loss Mitigation Affidavit may not be filed sooner than 28 days after SERVICE. RP 7-105.1(g)  Inability to contact or to obtain complete information is now valid basis of Final Affidavit  PRACTICE POINTERS:  Attorneys need billing point after completion of service and formal hold after completion of service in cases filed with Preliminary Loss Mitigation Affidavit.  Servicer cannot assume case proceeds after 28 days. Servicer must advise attorney when to proceed 18

19.  Procedural changes require an implementation of the flow of communication between us. If we are not sending NOI’s for you, then we must know occupancy and loss mitigation status at the time you refer the case to us. If we are sending NOI’s for you, we must have this information shortly before the NOI expires. We do not want to send you both Preliminary and Final Loss Mitigation Affidavits for you to chose. We want to send you the right Affidavit to sign when we are supposed to. If you want to produce the Affidavit internally and send it to us, that is fine.  If we file a case with a Preliminary Loss Mitigation Affidavit, you need to tell us when you have completed your loss mit and why you denied it. We cannot presume we can proceed after the 28 days. We envision these cases going on hold after service is completed and we envision you instructing us to take it off hold when you have completed loss mit. We will not proceed before the 28 day period, but the onus needs to be on you to tell us when to proceed. We can then send you a Final Loss Mitigation Affidavit to sign. 19

20.  When can sale be held? RP 7-105.1(l)  Other than owner occupied residential property, at least 45 days after service  If Final Affidavit is filed with OTD, at least 45 days after service  If Final Affidavit is mailed later, at least 30 days after mailing  If mediation is requested, at least 15 days after the mediation is held, or if there is no mediation, at least 15 days after OAH report is filed with the court  However, Rule 14-209.1(b) which states a sale cannot be “ advertised ” until 20 days after final loss mit affidavit in cases where property is owner occupied residential property or where residency status is unknown. This adds a minimum five days by rule to the earliest possible sale date.  Sale cannot be held until mediation is resolved if timely mediation is requested 20

21.  Per 7-105.1(g), before sale secured party must:  File Final Loss Mitigation Affidavit  Send a copy of the Affidavit  Send a copy of the Request for Mediation  Send the return envelopes (to court and to foreclosure attorney)  All to be sent by first class mail and by certified mail 21

22.  RP 7-105.1(h) contains everything in the statute regarding mediation  Requests for Mediation must be filed within 15 days of  Service of original papers if Final Affidavit was filed with OTD  Mailing of the Final Affidavit if Final Affidavit was subsequently filed  Must be accompanied by $50 filing fee unless waived  Copies to be filed with court and with foreclosure attorney 22

23.  The Maryland process is so convoluted because Maryland is a “non-judicial” state, the budget is tight and the General Assembly does not want to give the Court the funding it would need to make Maryland a judicial state  So they just pile on procedure after procedure  Four single spaced pages to merely outline the current steps in a routine, non contested foreclosure where no mediation is requested 23

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25.  As discussed, court goes go up $330  Fee for NOI, if attorney prepares (which is not part of allowable) will go up from $150 under old law to $250 under new law  MD attorneys have asked Fannie Mae to set a new fee that is commensurate with the most difficult judicial states  Until Fannie acts, MD attorneys will ask for $150 fee to file Final Loss Mitigation Affidavit in cases commenced with Preliminary Loss Mitigation Affidavit. This is only temporary until new fee is set.  Of course, there will need to be a fee set for mediation preparation and attendance  There will be increased costs regarding motions to stay, motions for mediation, motions to strike mediation, etc. 25

26.  Servicers and attorneys must cooperate quickly to meet July 1 deadline  Servicer MUST prepare acceptable description of eligibility requirements and provide it and HAMP materials to attorney  Servicer must designate “person” to me on envelope  Servicer has to approve fee increase for NOI and for Final LM Affidavit in cases where OTD has Preliminary LM Affidavit, as well as billing and hold points.  Servicer and attorney must has have information flow in place regarding occupancy and loss mitigation status  Servicer must decide whether to make change in breach process  Servicer must decide whether and when to use Preliminary LM Affidavit in cases where a Final LM Affidavit could be used where NOI was sent prior to July 1, 2010 26

27. §35-5-117  Scope: Very limited to protect the borrowers’ rights. Should not be construed to protect the lender’s rights.  Basics: a notice of the right to foreclose must be sent to the debtor no less than sixty (60) days prior to the first publication of foreclosure sale of an owner-occupied* residence.  The statute is effective July 1, 2010 and applies to any foreclosure that is initiated by publication on or after September 1, 2010. * Owner-occupied residence means a one-to-four family residence purchased and occupied as the principal residence of the debtor. 27

28.  The notice of the right to foreclose shall be sent to the last known mailing address of: (1) The principal debtor; and (2) Any co-debtors or guarantors if address is different than that of the principal debtor 28

29.  Lender, servicer, agent of the lender or servicer, or, at the discretion of the lender, the Trustee may send such notice. 29

30.  The notice shall be sent in a separate mailing.  The notice shall be sent regular mail.  The notice may be sent certified mail, although it is not required. 30

31.  Must include sufficient information to permit the debtor to contact the lender, servicer, or creditor and federal government officials responsible for any existing loan modification programs  Must provide information about persons authorized by the lender, servicer, or creditor to assist debtors in applying for such loan modification programs.  Must include the internet address of the Department of Housing and Urban Development (www.HUD.gov)  May include internet addresses of other government agencies operating existing loan modification programs known to the lender, servicer, or creditor. 31

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33.  Judicial sales ordered or conducted by any Court.  Sales conducted by a bankruptcy Trustee.  Sales conducted after a bankruptcy petition is filed and the automatic stay has been lifted by the bankruptcy Court.  Sale conducted if the borrower has obtained a prior loan modification or refinance before July 1, 2010. 33

34.  The notice is effective upon deposit with the United States postal service.  The notice is effective for any foreclosure sale after sixty (60) days and within twelve (12) months of sending such notice. 34

35.  The giving of the notice must be recited in the Notice of Foreclosure and in any deed memorializing the sale. 35

36.  Trustee shall postpone sale for not less than 30 days nor more than 60 days upon receiving written request and consent by the debtor if the Trustee determines that the notice was not sent as required 36

37.  Advertisement of the sale must be made at least 3 different times in a newspaper published in the county where the sale is to be made.  First publication must be at least 20 days prior to the sale.  Notice must be sent to the debtor and co-debtor on or before the first date of publication by registered or certified mail.  Must be sent to the debtor by registered or certified mail at the mailing address of the property and the last known mailing address of the debtor.  Separate notice must be sent to the co-debtor by registered or certified mail at the mailing at the last known mailing address of the co-debtor if different than the property address or mailing address of the debtor. 37

38.  The requirement to send a notice of the right to foreclose is in addition to any breach letter or demand letter that may be required under the terms of the Deed of Trust or Mortgage.  The notice of the right to foreclose does not replace the breach or demand letter and must be sent in a separate mailing from the breach or demand letter. 38

39. If you have any further questions that were not addressed in this presentation, or want to contact one of our speakers, please email Matt Bartel, COO of ALFN, at mbartel@alfn.org. Thank you for your participation in this webinar. Please complete the brief survey which you will be directed to at the conclusion of this presentation. ALFN provides the information contained in these webinars as a public service for educational and general information purposes only, and not provided in the course of an attorney-client relationship. It is not intended to constitute legal advice or to substitute for obtaining legal advice from an attorney licensed in the relevant jurisdiction. Use of ALFN Webinar Materials The information, documents, graphics and other material made available through this Webinar are intended for use solely in connection with the American Legal and Financial Networks (hereinafter “ALFN”) educational activities. These materials are proprietary to ALFN, and may be protected by copyright, trademark and other applicable laws. You may download, view, copy and print documents and graphics incorporated in the documents from this Webinar ("Documents") subject to the following: (a) the Documents may be used solely for informational purposes related to the educational programs offered by the ALFN; and (b) the Documents may not be modified or altered in any way. Except as expressly provided herein, these materials may not be used for any other purpose, and specifically you may not use, download, upload, copy, print, display, perform, reproduce, publish, license, post, transmit or distribute any information from ALFN Webinars in whole or in part without the prior written permission of ALFN. 39

40. ALFN’s 8 th Annual Leadership Conference July 18-21, 2010 Grand Hyatt Washington D.C. Register on our website at www.alfn.org 40