Changes Made To The Maryland Protection of Homeowners In Foreclosure Act
On April 3, 2008, Governor O'Malley signed a package of bills relating to foreclosures into law. The bills were put forth as "Emergency Legislation," which in Maryland means they become law the day the Governor signs them. While there were several bills in the package, I am going to concentrate on the changes to the Protection of Homeowners In Foreclosure Act, commonly referred to as PHIFA. There are a couple key points to the bill that are of critical importance. The first is that PHIFA is no longer just about foreclosures. Anyone who knowingly or unknowingly purchases an owner occupied residence that is 60 days or more late on the mortgage, must comply in all respects to the law. This has far reaching implications in the purchase and sale of real estate. More often than not, most buyers are never made aware of the mortgage payment status. As a result, any buyer could violate the law and risk fines, punitive damages, huge civil suits, and jail time without ever knowing they violated the law. The second issue is what PHIFA now calls a "Foreclosure Rescue Transaction." This is a transaction that includes a leaseback with an option to buy. By now, everyone should know that these transactions are taboo anywhere in the country, not just in Maryland. But there are still investors who are either naive and just trying to be nice, or are scam artists, who are still using this practice.So here are the best practice recommendations for purchasing any residential real estate in www.Maryland.Ensure you have documented proof of the mortgage status for each mortgage with a lien on the www.property.If you are interested in a property that is 60 days or more late on the mortgage, you can still purchase the property (as long as you are not a foreclosure consultant) provided the petition to foreclose has not yet been filed. But you must comply with PHIFA in all www.respects.Make sure you discuss your investing with an attorney who has litigation experience with www.PHIFA.Get a copy of the law so you have at least a basic understanding of it. Note, it is not as simple as some are purporting it to be. Make sure you discuss it with a licensed attorney. You can get a copy of the law from www.drpreforeclosure.com. Never, ever, ever, under any circumstances, for any reason, lease back to the homeowner with an option to buy.Be careful who you listen to for advice. There is a tremendous amount of mis-information about this www.law.This is just a basic article to make you aware of the existance of the law and to give you an idea as to its scope. If you are buying in Maryland, you need to investigate it further.Bruce Norton aka "Dr. Preforeclosure" is recognized by Maryland investors, Realtors(r), and attorneys as a leader in Maryland foreclosure investing and compliance with PHIFA. Mr. Norton is not an attorney. All claims and advice given by Mr. Norton should be discussed with an attorney prior to implementation.
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