For Appellant: Richard I. Chaifetz, Columbia, MD.
For Appellee: William J. Savage, Shapiro Brown & Alt, LLP, Manassas, VA; Bizhan Beiramee, McGinnis, Wutscher, Beiramee LLP, Bethesda, MD, all on the brief.
Wright, Graeff, Berger, JJ.
[222 Md.App. 3] Berger, J.
This appeal arises out of an order of the Circuit Court for Prince George's County denying exceptions to a foreclosure sale filed by Michelle Hobby (" Hobby" ). On April 13, 2009, Hobby refinanced her residence with a loan obtained from Freedom Mortgage Corporation (" Freedom" ) that was secured by a deed of trust on the property. Hobby defaulted on the mortgage and the substitute trustees brought an action [222 Md.App. 4] to foreclose the deed of trust. Hobby's property was ultimately sold at a foreclosure sale. On appeal, Hobby presents two issues for our review, which we have rephrased as follows:
1. Whether the circuit court erred when it declined to dismiss the foreclosure action.
2. Whether the circuit court erred in denying Hobby's exceptions to the foreclosure sale.
For the reasons that follow, we affirm the judgment of the Circuit Court for Prince George's County.
FACTUAL AND PROCEDURAL BACKGROUND
On April 13, 2009, Hobby refinanced her home with a loan from Freedom in the amount of $469,947. Freedom secured its loan by way of a deed of trust on Hobby's property. A few months later, Hobby defaulted on the loan due to her failure to remit several required payments to Freedom. Thereafter, Hobby requested a loan modification from Freedom. Freedom denied the request to modify the loan because the deed of trust had not been properly recorded. Freedom subsequently initiated a quiet title action which established the deed of trust as a valid and enforceable first lien against Hobby's property.
A representative of Freedom visited Hobby's home on February 27, 2010 in connection with Hobby's request to [222 Md.App. 5] modify her loan. Prior to this date, Freedom had unsuccessfully attempted to contact Hobby via telephone. Hobby was not home when the representative arrived, so the representative spoke with Hobby's neighbors
and left a contact letter on the front door of Hobby's residence.
On October 29, 2010, Freedom sent Hobby a notice of intent to foreclose which, pursuant to § 7-105.1(c) of the Real Property Article of the Maryland Code, was accompanied by a loss mitigation application. Subsequently, on July 6, 2012, the substitute trustees file d an order to docket and informed Hobby that she had the option of participating in a face-to-face foreclosure mediation with Freedom if she so desired.
On August 28, 2012, Hobby filed a Chapter 7 Bankruptcy Petition which automatically stayed the substitute trustees' foreclosure proceedings. At Freedom's request, however, the bankruptcy court lifted the stay on the foreclosure of Hobby's home on December 14, 2012.
Hobby elected to participate in a foreclosure mediation session with Freedom on February 12, 2013. During this [222 Md.App. 6] meeting, Hobby and Freedom reached an agreement wherein Freedom agreed not to proceed with its foreclosure until it reviewed, and acted upon, Hobby's application for a loan modification. Freedom also reserved the right to resume its foreclosure proceedings if Hobby failed to submit certain documentation supporting her application for a loan modification in a timely manner. On March 4, 2013, pursuant to the mediation agreement reached by Hobby and Freedom, the circuit court ordered that any foreclosure sale of Hobby's property be stayed for 60 days. The order further provided that the foreclosure case would be automatically dismissed without prejudice after the expiration of the 60 day stay, unless the substitute trustees filed a motion to lift the stay.
Ultimately, Hobby's request for a loan modification was denied. Thereafter, the circuit court granted the substitute trustees' request to lift the stay on the foreclosure proceedings. Hobby responded by filing a motion to stay or dismiss on April 2, 2013. In her motion, Hobby alleged that Freedom violated 24 C.F.R. § 203.604(b), which was incorporated into the deed of trust in this case, by not affording her an opportunity to engage in face-to-face mediation prior to the initiation of foreclosure proceedings. Nevertheless, on May 21, 2013 the substitute trustees conducted a foreclosure sale at which Freedom purchased Hobby's property. The substitute trustees filed a report of the foreclosure sale with the circuit court on June 18, 2013.
On June 5, 2013, the circuit court entered an order granting Hobby's April 2,
2013 motion to stay and dismiss. The substitute trustees subsequently moved to vacate the circuit court's order dismissing their foreclosure case. The circuit court granted the substitute trustees' motion, vacated its June 5, 2013 order, and set a hearing on Hobby's motion to stay or dismiss for August 26, 2013. The circuit court ultimately [222 Md.App. 7] denied Hobby's motion to stay or dismiss, explaining its reasoning as follows:
[Hobby] alleges that [Freedom] failed to comply with 24 C.F.R. § 203.604(b), which requires that the mortgagee have a " face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid." However, under 24 C.F.R. § 203.604(c)(5), if reasonable efforts to arrange such a meeting are unsuccessful, it is not necessary. At a minimum, the mortgagee must send a letter to the mortgagor and make at least one trip to the mortgagor at the mortgaged property.
At the hearing on August 26, 2013, [the substitute trustee] submitted a Field Contact Sheet, which was admitted into evidence as Plaintiff's Exhibit 1. This record demonstrated [Freedom's] multiple attempts to contact [Hobby] in order to arrange a face-to-face meeting: a phone call and voice-mail, a field visit to the mortgaged property, and a letter left at the front door of the home. Neighbors of [Hobby] confirmed her occupancy of the home. [Hobby's] refusal to acknowledge these ...