Nevertheless, as part of her bankruptcy filings, Borrower listed Servicer as one of her secured creditors, but did not separately list Loan Owner as one of them. Once the bankruptcy cases concluded, the foreclosure sale of the property was rescheduled to take place almost a year after the originally scheduled sale date.
Noting that the term "secured party" is not defined in RP §7-105.1(c), the Court of Appeals observed that Borrower's loan was subject to the UCC definition of "secured party" and that Servicer came within the UCC's definition of "secured party." The Court also noted that while more than one entity may qualify as a "secured party" under RP RP §7-105.1(c), "the statutory purpose of providing the borrower with advance notice and information to seek a loan modification or to negotiate some other alternative to foreclosure is best served by identifying all secured parties – particularly any that will share in the proceeds of a foreclosure sale – in the Notice of Intent to Foreclose."
Accordingly, the Appellate Court ruled that although a notice of intent to foreclose should ordinarily identify each entity that is a "secured party" under a deed of trust, the failure to disclose every secured party in this case was not a basis for dismissing a foreclosure action, in part because the Notice did identify one of the secured parties within the time required, and because Borrower had sufficient information about the status of her loan and to seek a loan modification.
Ralph T. Wutscher
McGinnis Wutscher LLP
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