Maryland Legal Alert for Financial Services

MARYLAND LEGAL ALERT keeps you updated on Maryland legal developments affecting financial services providers. If you would like more information about the items in this issue, please click on the specified links or contact any member of the Financial Services Practice Group. Learn more about Gordon Feinblatt by clicking here.
In this issue:

. NEW FORECLOSURE REGULATIONS, REGISTRY, AND RULES
. DEPOSITORY INSTITUTIONS MUST IMPLEMENT NEW ELDER ABUSE LAW
. LENDER AND TITLE COMPANY WIN IN CASE OF I.D. THEFT: NO DUTY FOUND

NEW FORECLOSURE REGULATIONS, REGISTRY, AND RULESAs reported in our 2012 Maryland Laws Update, the General Assembly passed two new laws impacting residential property foreclosures: Foreclosed Property Registry (House Bill 1373); and Pre-Foreclosure Mediation and Expedited Sale of Vacant Property (House Bill 1374). Emergency regulations, effective October 1, 2012, were issued by both the Maryland Department of Labor, Licensing and Regulation and the Maryland Department of Housing and Community Development to implement the new pre-foreclosure mediation process. Online access to the new foreclosure registry also is now available. In addition, changes to the Maryland Rules of Procedure are being considered to ensure compliance with the new residential property foreclosure laws. Please contact Margie Corwin or Bob Enten if you have any questions.

DEPOSITORY INSTITUTIONS MUST IMPLEMENT NEW ELDER ABUSE LAWBeginning October 1, 2012, depository institutions need to have in place an employee training program regarding elder finance abuse and must begin reporting "elder abuse" to specific identified government agencies. The Maryland Bankers Association has developed tools to assist in complying with these new Maryland law requirements. Click here if you need assistance.

LENDER AND TITLE COMPANY WIN IN CASE OF I.D. THEFT: NO DUTY FOUNDIn a very interesting opinion, Maryland's Court of Special Appeals determined that neither a lender nor a title company was negligent because neither owed a duty of care to an individual whose identity was fraudulently used to purchase two properties. In Iglesias v. Pentagon Title and Escrow, LLC, et al., filed August 30, 2012, the identity fraud victim claimed both the lender that financed the purchases and the title company that closed the purchases were liable to her for negligence. However, the Court determined that the identity fraud victim was not in privity or the equivalent of privity with the named defendants and, thus, the identity fraud victim's claims of negligence failed. The Court's analysis included a review of Maryland case law regarding a lender's duty owed to a borrower. It also reviewed law regarding reliance on facially valid powers of attorney (which relieved the lender of liability) and a title company's responsibilities owed to a lender (and not to a purchaser). Please contact Margie Corwin if you have any questions or comments.