Louisiana and Maryland Legislative Update

Louisiana and Maryland Legislative Update

The Louisiana legislature recently amended its Secure and Fair Enforcement of Mortgage Licensing Act of 2009 (“SAFE Act”), effective June 30, 2014 and its Consumer Credit Law, effective August 1, 2014.  The Maryland legislature recently amended its laws governing deficiency judgments, effective July 1, 2014.

 

LOUISIANA HOUSE BILL 807

 

The SAFE Act now applies to mortgage servicers.  “Mortgage servicing” means collecting or sending back payment for another, or the right to collect or send back payments for another, of principal, interest, tax, insurance, or other payment under a mortgage loan.

 

“Total loan volume” for purposes of determining an applicant’s surety bond under the SAFE Act is now calculated by adding, in addition to the current requirements, the total outstanding principal balance as of the end of the previous calendar year for all residential mortgage loans serviced.

 

LOUISIANA SENATE BILL 241

 

The Commissioner of the Office of Financial Institutions (“Commissioner”) may collect and compile information and data from all licensees concerning the operation, function, and extent of all consumer loan activities.  The information and data collected by the Commissioner from the licensee must include, for the preceding year, the following:

  • The total number and dollar amount of consumer loans originated, including installment, insurance premium finance, deferred presentment, and any other type of loan, as applicable.
  • The total number and dollar amount of consumer loans outstanding, including installment, insurance premium finance, deferred presentment, and any other types of loans, as applicable.
  • The aggregate amount of fees earned, including interest, service charges, late fees, origination fees, documentation fees, and insufficient funds fees.
  • The total number of consumer loans in default or collection status and the balance of those loans as of the reporting date.
  • The total number of consumer loans reduced to judgment and the principal amount of those judgments.

 

The information and data collected by the Commissioner must be reported by the licensee by March 1 of each year through the Nationwide Mortgage Licensing System and Registry or in a format deemed acceptable by the Commissioner, as required by the licensing system, or in a format prescribed by the Commissioner.

 

Upon request from the Commissioner, all licensees must submit any requested documentation to validate the information contained in the report in a format prescribed by the Commissioner.

 

Any licensee failing to adhere to the reporting requirements by filing untimely, inaccurate, or fraudulent reports may be subject to the assessment of penalties, remedies, or enforcement measures.

 

MARYLAND HOUSE BILL 274

 

After the final ratification of the auditor’s report following the sale, a secured party or an appropriate party in interest may file a motion for a deficiency judgment if the proceeds of the sale, after deducting all costs and expenses allowed by the court, are insufficient to satisfy the debt and accrued interest.

 

A motion for deficiency judgment must be filed within 3 years after the final ratification of the auditor’s report.

 

The secured party or party in interest must serve the motion in accordance with Maryland law.

 

The filing of a motion for a deficiency judgment constitutes the sole post-ratification remedy available to a secured party or party in interest for breach of a covenant contained in a deed of trust, mortgage, or promissory note that secures or is secured by owner-occupied residential property.

 

The provisions above apply to any motion for a deficiency judgment that is filed on or after July 1, 2014 on a deed of trust, mortgage, or promissory note that secures or is secured by residential property that was owner-occupied residential property at the time the order to docket or complaint to foreclose was filed.

 

Any cause of action to collect the unpaid balance due on a deed of trust, mortgage, or promissory note that has been signed under seal and secures or is secured by residential property that was owner-occupied residential property at the time the property was transferred with the unpaid balance that arises before July 1, 2014 must be filed within 12 years after the date the action accrues or before July 1, 2017, whichever occurs first.

 

Any motion for a deficiency judgment on a deed of trust, mortgage, or promissory note that secures or is secured by a residential property that was owner-occupied residential property at the time the order to docket or complaint to foreclose was filed for which an auditor’s report has final ratification before July 1, 2014 must be filed within 3 years after the date of final ratification or before July 1, 2017, whichever occurs first.