Title: Shepherd v. Burson

State: maryland

Issuer: Maryland Supreme Court

Document:

Camille C. Shepherd v. John S. Burson
No.110, September Term 2011.
Real Property – Foreclosure Proceedings – Notice of Intent to Foreclose – Secured
Party.  Under Maryland Code, Real Property Article, §7-105.1(c), a foreclosing party must
provide advance written notice to a homeowner/borrower about its intention to foreclose.
Among other things, that notice must provide the name and telephone number of “the secured
party.”  In situations in which more than one entity qualifies as a secured party with respect
to the loan, the Notice of Intent to Foreclose should identify each such entity.  
Real Property – Foreclosure Proceedings – Notice of Intent to Foreclose – Remedy for
Defective Notice.  A failure to identify all secured parties in a Notice of Intent to Foreclose
does not require dismissal of the foreclosure action when the notice identifies one of the
secured parties, the notice provides other statutorily required information that allows the
borrower to pursue a loan modification, the identity of the other secured party is disclosed
to the borrower well in advance of the foreclosure sale, and the borrower does not move to
dismiss the foreclosure proceeding on the basis of a defective notice for more than a year
after such disclosure.
IN THE COURT OF APPEALS
OF MARYLAND
No. 110
September Term, 2011
                                                                  
Camille C. Shepherd
v.
John S. Burson, et al.
                                                                  
Bell, C.J.  
Harrell      
Battaglia   
Greene      
Adkins      
Barbera    
McDonald
                 JJ.
                                                                  
Opinion by McDonald, J.
                                                                  
Filed:   August 20, 2012
Among the issues that surfaced during the recent foreclosure crisis was a concern that
some homeowners received insufficient warning of an impending foreclosure and, as a
result, lacked time to prepare a defense or to pursue loan modification.  In response, the
General Assembly enacted a statute in 2008 to require that a foreclosing lender provide
advance written notice to the borrower of its intention to foreclose.  Among the information
to be provided in that notice is the identity of “the secured party,” although the statute does
not specifically define that phrase.  In many instances there will be one secured party with
respect to the particular deed of trust.  In some instances, as in the present case, there may
be more than one entity that qualifies as a “secured party” under the commonly understood
meaning of the phrase.  In this case, we must decide whether, in such a situation, a
foreclosing party is obligated to identify all secured parties in the advance written notice to
the borrower, and the consequences if the notice fails to do so.
We hold that a foreclosing party should ordinarily identify, in the Notice of Intent to
Foreclose, each entity that is a “secured party” with respect to the deed of trust in question.
However, a failure to disclose every secured party is not a basis for dismissing a foreclosure
action when the notice identifies a secured party, the notice contains the other information
required by the statute that allows the borrower to pursue a loan modification, the identity
of the other secured party is elsewhere disclosed to the borrower well in advance of the
foreclosure sale, and the borrower does not move to dismiss the foreclosure action on the
grounds of defective notice for more than a year after such disclosure.  
2
Notice of Intent to Foreclose
Prior to 2008, most foreclosure actions were commenced in Maryland when the
foreclosing party filed an Order to Docket in the appropriate circuit court together with the
instrument that provided authority to foreclose and a statement of the debt.  Maryland Rule
14-204 (2007).  Then, as now, the authority to foreclose through an Order to Docket  derived
from the power-of-sale provision in the deed of trust or other security instrument.  Maryland
Code, Real Property Article (“RP”), §7-105(a) (2003 Repl. Vol. & 2007 Cum. Supp.).
Notice to the homeowner was required, but could be given after the foreclosure proceeding
was docketed.  RP §7-105(a-1) (2003 Repl. Vol. & 2007 Cum Supp.).  
In 2007, in response to rising loan default and foreclosure rates in Maryland, the
Governor created the Maryland Homeownership Preservation Task Force (the “Task Force”).
Among other things, the Task Force was charged with reviewing the laws governing the
foreclosure process and recommending changes.  Maryland Homeownership Preservation
Task Force Report (November 29, 2007) (“Task Force Report”).
  
The Task Force found that the foreclosure process in Maryland was designed to
operate expeditiously and, in theory, could result in a sale as soon as 15 days after the filing
of the Order to Docket, with relatively little notice to the borrower.  Task Force Report at 35-
36.  The Task Force also concluded that existing notice requirements “generally fail to
capture the attention of the homeowner in crisis to alert them to a pending foreclosure action,
and the process does not afford homeowners adequate time to mitigate their loss or present
defenses to the foreclosure action.”  Task Force Report at 36. 
3
To address those issues, the Task Force recommended legislation that would preclude
the filing of an Order to Docket until at least 90 days after the borrower’s default and at least
45 days after a notice of intent to foreclose had been sent to the borrower.  Task Force Report
at 36-37.  The proposed notice requirement was apparently derived from similar legislation
proposed in Massachusetts.  Id. at 37.  While the Task Force did not agree on the precise
content of the notice, it did agree that it should be in a standardized format and that the lender
or mortgage note holder should send a copy of the notice to the Commissioner of Financial
Regulation, as well as the borrower.  Id.
The General Assembly adopted those recommendations in emergency legislation
enacted in 2008.  Chapters 1, 2, Laws of Maryland 2008.  The legislation provided that a
foreclosure action generally may not be filed against a residential property until at least 90
days after the borrower defaults on the loan.  RP §7-105.1(b)(1)(i).  In regards to notice, the
statute required written advance notice to the borrower at least 45 days before the initiation
of foreclosure proceedings.  Among other things, that notice is to contain the names and
telephone numbers of the following:  the secured party; the mortgage servicer, if applicable;
and an agent of the secured party who is authorized to modify the terms of the mortgage loan.
RP §7-105.1(c)(4)(ii)(1).  “Secured party” is not defined in the statute.  
This case concerns the appropriate definition of the “secured party” that must be
identified in the Notice of Intent to Foreclose required by RP §7-105.1(c), and the fulfillment
of that notice requirement. 
The Shepherd Loan and Foreclosure
1 The loan documents identify the lender as “IndyMac Bank.”  It is unclear whether
the actual institution that owned the loan at this time was IndyMac Federal and, if so, why
the loan documents did not identify IndyMac Federal as the lender.
2 The original trustee on the deed of trust was Fidelity National Title Insurance Co.
The deed of trust permitted the holder of the note – in this case, OneWest – to appoint
successor trustees for the original trustee.  OneWest appointed the attorneys who acted as
substitute trustees in conjunction with the foreclosure proceeding.
4
2007 - 2008:  Loan and Default
On April 27, 2007, Camille Shepherd, an attorney residing in Greenbelt, obtained a
loan of $416,900 from the Independent National Mortgage Corporation, FSB (“IndyMac
Bank”), secured by a deed of trust on her home.  Shortly thereafter, IndyMac Bank went into
receivership and its assets, including Ms. Shepherd’s debt, were transferred to a newly
created bridge bank, IndyMac Federal Bank, FSB (“IndyMac Federal”).  On August 18,
2008, Ms. Shepherd entered into a loan modification agreement with IndyMac Bank1 that
lowered the interest rate on her loan and, as a result, reduced the monthly payment.  
Ms. Shepherd failed to make the monthly payment due in November 2008 and
defaulted on the loan.  The bank took no immediate action with respect to the default.  
2009:  Notice of Intent to Foreclose - Stay by First Bankruptcy Petition
On March 19, 2009, IndyMac Federal transferred its assets, including Ms. Shepherd’s
loan, to another newly created bank, OneWest Bank FSB.  On June 5, 2009, the substitute
trustees,2 on behalf of OneWest, sent Ms. Shepherd a Notice of Intent to Foreclose pursuant
to RP §7-105.1.  The Notice, on stationery of the substitute trustees, was in a standard format
established by the State Commissioner of Financial Regulation.  Among other things, it listed
3 In a Chapter 7 proceeding, an individual “give[s] up property which is not ‘exempt’
under the law, so the property can be sold to pay creditors.  Generally, those who file Chapter
7 keep all of their property except property which is very valuable or which is subject to a
lien which they cannot avoid or afford to pay.”  18-CS4 Collier on Bankruptcy §CS4.03
(16th ed. 2012).
5
the borrower, the mortgage loan number, the dates of the most recent loan payment and of
the default, and the extent to which loan payments were past due.  It identified the “secured
party” on the loan as OneWest and provided the name and phone number of a person with
authority to modify the terms of the loan.
On June 26, 2009, Ms. Shepherd filed a bankruptcy petition under Chapter 7 of the
Bankruptcy Code,3 which automatically stayed the foreclosure proceeding.  In a schedule
attached to that petition she identified OneWest as a secured creditor as a result of the
assignment from IndyMac Federal.  On August 4, the Bankruptcy Court lifted the stay as to
OneWest “so as to enable it to exercise its rights under state law[.]”  In October 2009, Ms.
Shepherd  received a discharge from other debts in the Chapter 7 proceeding.
4 Among the other documents filed by the substitute trustees with the Order to Docket
were an Affidavit of Date and Nature of Default; an Affidavit Certifying Ownership of Debt
Instrument and that Copy of Note is a True and Accurate Copy; and a Statement of Debt.
The Statement of Debt also identified OneWest as the holder of the note.  The substitute
trustees also filed, at a later date, an Affidavit of Mailing to All Occupants “Important
Notice” Pursuant to Article-Real Property 7-105.9(b)(1) and Maryland Rule 14-209(c), and
an Affidavit Pursuant to Maryland Rule 14-126(c).  
5 A Chapter 13 proceeding is “a type of ‘reorganization’ used by individuals to pay
all or a portion of their debts over a period of years using their current income.”  18-CS4
Collier on Bankruptcy §CS4.03 (16th ed. 2012).
6
2009 - 2010:  Filing of Foreclosure Action - Stays by Second and Third Bankruptcy Petitions
After the bankruptcy stay was lifted, the substitute trustees initiated the instant
foreclosure action on October 28, 2009, in the Circuit Court for Prince George’s County.
Among the various documents filed to commence the action was a copy of the Notice of
Intent to Foreclose which, as indicated above, identified OneWest as “the secured party,” and
an Affidavit Certifying Ownership of Debt Instrument, which identified the Federal Home
Loan Mortgage Corporation (“Freddie Mac”) as the owner of the loan and OneWest as the
holder of the note secured by a deed of trust.4  Ms. Shepherd was served with the documents
the following day.  This was apparently the first time that Freddie Mac’s involvement was
disclosed to Ms. Shepherd, as it had not been listed as a secured party in the Notice of Intent
to Foreclose.  The foreclosure sale was scheduled for February 9, 2010.
On February 8, 2010, one day prior to the scheduled sale, Ms. Shepherd filed a second
bankruptcy petition, this time under Chapter 13 of the Bankruptcy Code,5 which again stayed
the foreclosure proceeding.  A schedule attached to that petition, like the schedule
6 Maryland Rule 14-207.1 provides that “[i]f the court determines that the pleadings
or papers filed do not comply with all statutory and Rule requirements, it may give notice to
the plaintiff and each borrower, record owner, party, and attorney of record that the action
will be dismissed without prejudice ...”
7
accompanying her earlier petition, identified OneWest as a secured creditor, although the
documents filed three months earlier in the foreclosure proceeding had notified her that
Freddie Mac now owned the loan and that OneWest was the holder of her promissory note.
The second bankruptcy action was dismissed in June 2010.
The foreclosure sale was then rescheduled for September 14, 2010.  On September
13, however, Ms. Shepherd filed another Chapter 13 bankruptcy petition; on the schedules
in that proceeding, she again identified OneWest as a secured creditor.  That petition was
also dismissed, and the foreclosure sale was rescheduled for January 2011.
2010 - 2011:   Motion to Dismiss Foreclosure Action
On December 15, 2010, Ms. Shepherd moved to dismiss the foreclosure sale pursuant
to Maryland Rule 14-207.1, based on irregularities in the Notice of Intent to Foreclose.6
Specifically, citing the documents the substitute trustees had filed in the foreclosure action
and served on her more than a year earlier that identified Freddie Mac as the owner of her
loan, she contended that the failure to identify Freddie Mac as the secured party in the notice
violated RP §7-105.1(c)(4)(ii)(1)(A).  The circuit court canceled the foreclosure sale to afford
review of the motion.  
The circuit court ultimately denied the motion on January 3, 2011.  It noted that RP
§7-105.1 did not provide a remedy for the alleged violation and indicated that it would
7 The court quoted the following excerpt from that rule:
If no consequences are prescribed, the court may compel
compliance  with the rule or may determine the consequences of
the noncompliance in light of the totality of the circumstances
and the purpose of the rule.
Maryland Rule 1-201(a).
8
exercise its discretion under Maryland Rule 1-201(a)7 to decide what remedy, if any, was
appropriate.  Reasoning that any deficiency in the notice had not prejudiced Ms. Shepherd
or infringed her substantive rights, the circuit court concluded that the foreclosure action
should not be dismissed.
Ms. Shepherd moved for reconsideration, arguing that the court’s reliance on
Maryland Rule 1-201 was an unconstitutional use of a court rule to negate the requirements
of a statute.  Adopting the reasoning offered by the substitute trustees in their response to that
motion, the circuit court on March 7, 2011, denied the motion on the additional basis that the
Notice of Intent to Foreclose had not violated RP §7-105.1(c).  
2011 - 2012:  Foreclosure Sale - Exceptions - Appeal
Following denial of the motion to reconsider, the foreclosure sale was held on March
8, 2011.  Freddie Mac purchased the property for $237,276.  Ms. Shepherd filed exceptions
reiterating her allegation that the notice was defective.  Those exceptions were denied and
the circuit court ratified the sale.  
Ms. Shepherd noted a timely appeal to the Court of Special Appeals.  Prior to briefing
or a decision in that court, she petitioned this Court for a writ of certiorari, which we granted.
8  While it is not clear from the record when Freddie Mac became the owner of the
loan, it is apparently undisputed that Freddie Mac was the owner of the loan at the time the
Notice of Intent to Foreclose was sent. 
9
 Discussion
Ms. Shepherd argues that “the secured party” mentioned in RP §7-105.1(c) is
necessarily the owner of the loan, and that a mortgage servicer — even if a holder of the
promissory note — cannot also be “the secured party.”  As Freddie Mac is the owner of her
loan,8 she asserts that it, and not OneWest, is “the secured party” that should have been
identified in the Notice of Intent to Foreclose that the substitute trustees sent to her prior to
the foreclosure action.  In addition, she argues that the failure to identify Freddie Mac in that
Notice meant that the Notice was “bogus” and deceptive and therefore ineffective.  She also
reiterates her contention that the circuit court improperly used Maryland Rule 1-201 to
“trump” the statutory requirement.  For those reasons, she asserts that the foreclosure action
should be dismissed. 
The Secured Party
An initial question is the meaning of “the secured party” for purposes of the notice
requirement in RP §7-105.1(c).  As noted above, the statute itself does not define that phrase.
In the absence of a statutory definition or cross-reference, it is reasonable to conclude that
the Legislature contemplated a meaning consistent with the commonly understood meanings
of the phrase in connection with residential mortgages and deeds of trust at the time it
enacted the statute.  See Board of Education v. Lendo, 295 Md. 55, 63, 453 A.2d. 1185
10
(1982).  Informative in this regard are the statutes that determine the rights of secured parties
and the court rules that govern foreclosure proceedings. 
A deed of trust secures a promissory note that embodies the promise to repay a loan.
The promissory note and related security interests are subject to the Maryland Uniform
Commercial Code (“Maryland UCC”), Maryland Code, Commercial Law Article (“CL”), §1-
101 et seq.  See, e.g., Anderson v. Burson, 424 Md. 232, 246, 35 A.3d 452 (2011) (“[t]he ...
Commercial Law Article governs a negotiable promissory note that is secured by a deed of
trust”).  In the Maryland UCC, “secured party” is defined as:
(A)
 A person in whose favor a security interest is created or
provided for under a security agreement, whether or not
any obligation to be secured is outstanding; 
(B) 
A person that holds an agricultural lien; 
(C) 
A consignor; 
(D) 
A person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold; or 
(E) 
A trustee, indenture trustee, agent, collateral agent, or
other representative in whose favor a security interest or
agricultural lien is created or provided for; or
(F) 
A person that holds a security interest arising under §2-
401, §2-505, §2-711(3), §2A-508(5), §4-210, or §5-118
of [the Maryland UCC].
CL §9-102(a)(73) (emphasis added).  Under this definition Freddie Mac is certainly a secured
party with respect to Ms. Shepherd’s promissory note, as an entity to which the promissory
9 Ms. Shepherd urges us to ignore the definition in the court rules.  She quotes the
preamble to the definitions in the foreclosure rules, which states that they apply  “[i]n the
Rules in this Chapter,” and argues that the definition of “secured party” should not be
referenced in the interpretation of a statute such as RP §7-105.1.  While she is correct, in a
technical sense, that the foreclosure rules cannot control the definition of terms in statutes,
it is quite evident that the Legislature and this Court, in its rule-making capacity, intended
for the statute and rules to be interpreted consistently.  
Ms. Shepherd also argues that reference to the definition in the court rules is an
unconstitutional use of a rule to “trump” a statute.  However, our consideration of the rule
is part of our effort to discern legislative intent as to an undefined statutory term, not to
override it.  A venerable principle of interpretation holds that statutes (or rules) that concern
the same subject matter – in the Latin phrase, in pari materia – should be construed
consistently with each other.  See, e.g., Johnson v. State, 274 Md. 29, 41-42, 333 A.2d 37
(1975).  Absent a clear indication of contrary legislative intent, it is reasonable to presume
that the Legislature intended that its enactment should be construed harmoniously with an
existing court rule on the same subject. 
11
note has been sold.  However, that does not mean that OneWest does not also qualify as a
secured party, as the definition can encompass trustees and agents in some instances.
The court rules yield a similar conclusion.9  At the time the Legislature enacted RP
§7-105.1 in 2008, the court rules governing foreclosure defined “secured party” for purposes
of a foreclosure action as follows:
“Secured party” means a mortgagee, the holder of note secured
by a deed of trust, a vendor holding a vendor’s lien, a
condominium council of unit owners, a homeowners’
association, a property owners’ or community association, and
any other party secured by a lien.  “Secured party” includes an
assignee or successor in interest of a secured party.
10 The rules governing foreclosure were revised significantly in 2009 and 2010, in part
to coordinate with the newly enacted RP §7-105.1.  The definition of “secured party,” while
recodified and revised slightly, continues to encompass an assignee or successor interest, as
well as a “holder of a note secured by a deed of trust ...”  Maryland Rule 14-202(q) (2012).
11 Ms. Shepherd does not concede that OneWest is the holder of the note or was the
holder of the note when the Notice of Intent was sent.  She describes OneWest, rather, as a
transferee of the loan for the specific purpose of acting on Freddie Mac’s behalf in the
bankruptcy and foreclosure proceedings.  She contends that, given this status, it was unlikely
that OneWest was a holder of the note when the Notice of Intent was sent on June 5, 2009.
Ms. Shepherd did not make this argument in the circuit court.  In any event, the copy
of the note contained in the record indicates that it was originally held by IndyMac Bank.
It is undisputed that IndyMac Bank’s assets were subsequently transferred to IndyMac
Federal and, in March 2009 –  approximately three months before the Notice of Intent to
Foreclose was sent – IndyMac Federal sold its assets to OneWest Bank. 
12 See RP §7-105.1(c)(4)-(5) (directing the Commissioner of Financial Regulation to
prescribe the form of the Notice of Intent to Foreclose and to determine other information
that should be included in the Notice).
13 The cross reference to the definition of “secured party” in the court rules was added
to the regulation in 2011.  See 38:23 Md. Reg. 1416 (October 25, 2011).
12
Maryland Rule 14-201(b)(10) (2008) (emphasis added).10  Again, Freddie Mac is a secured
party under this definition as an assignee or successor in interest of the prior owner of the
note.  OneWest is also a “secured party,” as the holder of Ms. Shepherd’s note,11 under that
definition.
Finally, it is notable that the Commissioner of Financial Regulation, in carrying out
a legislative directive to devise forms and adopt regulations implementing the 2008 revisions
of the foreclosure process,12 has cross-referenced the definition of “secured party” in the
foreclosure rules.  COMAR 09.03.12.01B(23).13  The Commissioner’s adoption of the
definition in the court rules is entitled to some deference, given the specific legislative
13
delegation to that official to adopt regulations with respect to the notice requirement.  Cf.
Sec’y Dep’t of Pub. Safety & Corr. Servs. v. Demby, 390 Md. 580, 604-5, 890 A.2d 310, 325
(2006). 
Fulfillment of Requirement to Identify Secured Party in Notice
The determination that OneWest is a secured party for the purposes of RP §7-105.1(c)
does not resolve this appeal.  Ms. Shepherd is correct that Freddie Mac is also a secured party
with respect to her loan.  Under the broad definition of “secured party” in both the Maryland
UCC and the foreclosure rules, there may – as in this case – be more than one secured party.
Yet the statute requires that a Notice of Intent to Foreclose contain the name and telephone
number of “the secured party.”  RP §7-105.1(c)(4)(ii)(1)(A) (emphasis added).  This
provokes the question whether a Notice of Intent to Foreclose may name any secured party,
must name one particular secured party, or must name every secured party.  In other words,
in the present case, was it sufficient for the Notice of Intent to Foreclose to identify one
secured party – OneWest – or should it have identified Freddie Mac as well as (or instead of)
OneWest?
It is useful to consider the purpose of the notice.  The notice requirement was designed
to provide homeowner/borrowers at risk of foreclosure with additional time and information
to avoid foreclosure.    Maddox v. Cohn, 424 Md. 379, 387, 36 A.3d 426 (2012).   A clear
identification of a party with whom the homeowner could negotiate a possible alternative to
14 In describing the benefits of that requirement in the notice, a proponent of the 2008
legislation explained that “[t]he complexity of the securitization and secondary market sales
of mortgage loans in foreclosure further exasperates an already confusing and urgent process.
Once the note holder is identified, reaching a representative of the lender that is authorized
to modify the mortgage loan or review the account to verify accuracy is almost an
insurmountable obstacle and one that can rarely be achieved in time to stay the sale.”
Testimony of Anne Balcer Norton, Director, Foreclosure Prevention, St. Ambrose Housing
Aid Center, Inc., before Senate Judicial Proceedings Committee in support of Senate Bill 216
(February 5, 2008).
14
foreclosure was a preeminent purpose.14  The Task Force’s recommendation of advance
written notice “was based on proposed legislation in Massachusetts that requires as a pre-
requisite to filing foreclosure the sending of a Notice of Intent to Foreclose ... [and] requires
that the Notice be uniform and include fact of default and that foreclosure can be filed after
the period, the contact information of all involved (servicer, assignee, mortgage company,
etc.) and resources for assistance.” Task Force Report at 37 (emphasis added).  However, the
Task Force was apparently unable to reach a consensus on the precise content of a notice
form.  
When it enacted the legislation based on the Task Force recommendation, the
Legislature specified the following content for the notice:
1.
The name and telephone number of:
A.  The secured party;
B.  The mortgage servicer, if applicable; and  
C.  An agent of the secured party who is authorized to
modify the terms of the mortgage loan;
15
2.
The name and license number of the Maryland mortgage
lender and mortgage originator, if applicable;
3.
The amount required to cure the default and reinstate the
loan, including all past due payments, penalties and fees [.] 
RP §7-105(c)(4)(ii)1.-3.  The Legislature authorized the Commissioner of Financial
Regulation to require other information and delegated to the Commissioner the creation of
a notice form.  RP §7-105.1(c)(4)(i), (ii)5-7.
The form devised by the Commissioner contemplates circumstances under which an
entity servicing a loan is also identified as “the secured party,” as the relevant line on the
form is labeled “Name of Loan Servicer (if different from Secured Party).”  See COMAR
09.03.12, Appendix A.  It is not clear, however, whether the proviso on the form is meant to
cover only situations in which a lender services its own loans or contemplates situations –
as the instant case – in which a servicer that does not currently own the loan also happens to
be a secured party.  The form provides that “[i]f the secured party is a trust, real estate
mortgage investment conduit (“REMIC”), or the like, the secured party may insert the
telephone number of its authorized loan servicer.”  Thus, when the secured party is a legal
entity that functions as a passive investment vehicle (and likely has no physical component)
rather than a financial institution, the form requires identification of the entity but allows for
the option of providing contact information of the servicer alone.  The Commissioner has
15 Identification of the secured party in addition to the servicer can be important as
servicers sometimes can have different incentives than the owners of a debt with respect to
the desirability of negotiating a loan modification as we have noted in another context.  See
Curtis v. US Bank Nat’l Ass’n  ___ Md. ___, ___ A.3d ___ (2012), slip op. at p.12 n. 17.
16 In her reply brief, Ms. Shepherd suggested that Freddie Mac was motivated to
conceal its ownership of her loan to avoid a dispute over whether a government-sponsored
enterprise or “GSE” – as Freddie Mac is sometimes characterized – is exempt from state
recordation and transfer taxes.  She did not explain how Freddie Mac could benefit in this
regard from the substitution of OneWest –  a private entity presumably subject to such taxes
(continued...)
16
thus construed the statute to require identification of the actual secured party coupled with
a practical means of pursuing loan modification.15
In sum, neither the statute nor its legislative history appear to contemplate explicitly
situations in which there would be multiple entities that would each qualify as a “secured
party” with respect to a deed of trust subject to an impending foreclosure.  In our view, 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.
Whether the Foreclosure Proceeding Should be Dismissed
Ms. Shepherd characterizes the Notice of Intent to Foreclose that she received as
“unfair,” “deceptive,” “misleading,” and “bogus.”  She says the omission of Freddie Mac
from the notice “utterly lacks in transparency” and “negatively impacts upon the integrity of
the judicial process itself.”  She contends that dismissal of the foreclosure action is
required.16 
16 (...continued)
that would pass on the expense to Freddie Mac – and apparently abandoned this contention
at oral argument.
17 This is not a situation in which the foreclosing party provided an advance notice
with materially misleading information concerning an individual’s rights or obligations in
connection with a foreclosure.  Cf.  Curtis v. U.S. Bank NA, ___ Md. ___, ___ A.3d ___
(2012) (contradictory and misleading notices served on tenant of defaulting
landlord/borrower concerning tenant’s statutory right to remain in residence for specified
period following foreclosure sale).
17
Ms. Shepherd’s preferred adjectives do not fit the notice in this case; “incomplete”
seems a more apt description.  Moreover, it is difficult to conclude that Ms. Shepherd was
deceived or otherwise treated unfairly in the foreclosure proceeding.17  The evident purpose
of the written notice required by RP §7-105.1(c) is to provide some advance warning to the
defaulting borrower of the foreclosure proceedings; the identification of “the secured party”
and other specified information is to allow the borrower to pursue a modification of the loan
or other action to forestall foreclosure.  Here there is no dispute that Ms. Shepherd received
written notice not just 45 days, but more than four months in advance of the filing of the
foreclosure action.  The written notice included details to allow her to seek a loan
modification, including the name and phone number of a specific individual.  She was well
aware of the potential to negotiate a loan modification, as she had previously negotiated a
modification of the same loan.
To the extent that her complaint is that she wished to seek a loan modification directly
from Freddie Mac and not through OneWest or the individual designated in the notice,
Freddie Mac’s status was hardly a secret.  Freddie Mac’s ownership of her loan was
18
disclosed to her by at least October 2009 – four months before the first scheduled foreclosure
sale and nearly 18 months before the foreclosure sale that actually took place – both well in
excess of the 45-day interval contemplated in RP §7-105.1.  There is no indication in the
record that she attempted to contact Freddie Mac during that period.  Indeed, she did not file
a motion to dismiss the foreclosure proceeding based on the failure to name Freddie Mac in
the Notice of Intent to Foreclose for more than a year after Freddie Mac’s ownership of her
loan was disclosed to her.  Nor has she suggested what she would have done differently had
Freddie Mac also been identified earlier as a secured party in the Notice of Intent to
Foreclose.  It is thus unsurprising that she has some difficulty articulating any specific harm
she has suffered from that omission.  For that same reason, the circuit court concluded that
it was unnecessary to devise a remedy.
This case is not unlike U.S. Bank Nat’l Ass’n v. Guillaume, 209 N.J. 449, 38 A.3d 570
(2012), in which the New Jersey Supreme Court considered the application of a similar
notice provision in the New Jersey Fair Foreclosure Act.  Like RP §7-105.1(c), the New
Jersey statute required that a foreclosing party provide a defaulting homeowner with a written
advance notice of its intention to foreclose.  The written notice was to include the name and
address of the “lender,” as well as contact information for the servicer for purposes of
seeking a loan modification.  In Guillaume, the notice served in advance of the foreclosure
action included the name and phone number of the servicer, but did not name the lender.
After the commencement of foreclosure proceedings, the homeowner/borrower corresponded
with the servicer about a possible loan modification and was also notified that U.S. Bank
19
Nat’l Ass’n  was the lender seeking foreclosure.  After entry of a judgment in favor of the
lender, the homeowner/borrower objected to the failure to include the lender’s name in the
advance notice and asked the court to vacate the judgment.  The trial court ordered the
service of a revised notice, but declined to dismiss the foreclosure proceedings or vacate the
judgment on the basis that the original notice had fulfilled the purpose of the Fair Foreclosure
Act in advising the homeowner of the entity to contact for a possible loan modification.
On appeal, the New Jersey Supreme Court held that the New Jersey statute clearly
required identification of the lender, in addition to the servicer, in the notice of intent to
foreclose, and that the failure to do so rendered the notice defective.  Provision of
information concerning the servicer alone was not “substantial compliance” with the statute.
38 A.3d at 583.  However, given that the homeowner/borrower had sufficient information
to enter into loan modification negotiations and had been otherwise notified of the identity
of the lender, the revised notice was sufficient to remedy that defect and there was no need
to vacate the foreclosure judgment.  Id. at 585.  The Court rejected the homeowner’s
argument that the foreclosure proceeding should have been dismissed and restarted.  The
Court also explicitly disapproved a decision of the New Jersey intermediate appellate court
that held that dismissal of a foreclosure action would ordinarily be the appropriate remedy
when a notice failed to identify the lender.  Id. at 586-87.
In Guillaume, the defect in the notice of intent to foreclose was more readily apparent
than in the instant case, as the New Jersey Fair Foreclosure Act itself defined “lender” and
it was clear that the entity fitting that definition had been omitted from the notice of intent
18 RP §7-105 includes a statute of limitations for an “action for failure to comply with
the provisions” of the statute, but does not specify a specific remedy for particular types of
non-compliance.  RP §7-105.1(o).  
20
to foreclose.  The case thus concerned the appropriate remedy, given that defect in the notice
in light of the other information available to the homeowner/borrower.  In Ms. Shepherd’s
case, the notice is arguably not defective in that it does identify one, though not all, secured
parties, and RP §7-105.1 is somewhat ambiguous on whether further disclosure was required.
In any event, Ms. Shepherd had as much information, within the critical time frame, as the
homeowner in Guillaume concerning the status of her mortgage, the possibility of seeking
a loan modification, and the identity of the owner of her loan. 
As the circuit court correctly observed, the statute that establishes the advance notice
requirement does not prescribe a specific remedy for defects in a Notice of Intent to
Foreclose.18  Ms. Shepherd sought dismissal of the foreclosure action under Maryland Rule
14-207.1 which provides that a court “may” notify parties that it will dismiss a foreclosure
action or issue some “other appropriate order” for non-compliance with statutes or rules
governing foreclosure.  That rule contemplates an opportunity for the foreclosing party to
remedy the deficiency within 30 days.  Maryland Rule 14-207.1(a).  Like the New Jersey
Supreme Court, we do not believe that the defect in the Notice of Intent to Foreclose requires
dismissal of the foreclosure action in the circumstances of this case. Accordingly, we hold
19 As noted earlier, Ms. Shepherd complains that the circuit court unconstitutionally
relied on Maryland Rule 1-201(a) to override the notice requirements of RP §7-105.1(c).
However, the circuit court’s reference to Rule 1-201 appears to have been to the basic
principle – which applies to the interpretation of statutes as well as rules – that the failure to
specify consequences of non-compliance in a statute or rule grants discretion to a court to
determine the consequences in light of the particular facts and the purpose of the rule or
statute.  Schaller v. Castle Development Corp.,  347 Md. 90, 96, 698 A.2d 1106 (1997).
21
that the circuit court properly exercised its discretion to deny the motion to dismiss the
foreclosure action.19
Conclusion
A foreclosing party should ordinarily identify, in the Notice of Intent to Foreclose,
each entity that is a “secured party” with respect to the deed of trust to be foreclosed.
However, a failure to disclose every secured party is not always a basis for dismissal of a
foreclosure action.  In this case, the notice identified a secured party and contained the other
information required by RP §7-105.1 that allowed Ms. Shepherd to pursue a loan
modification if she desired to do so.  Moreover, Freddie Mac’s ownership of her loan was
elsewhere disclosed to her well in advance of the foreclosure sale, and she did not move to
dismiss the foreclosure action on the grounds of defective notice for more than a year after
that disclosure.  In these circumstances, the dismissal of the foreclosure action was not
required.  
 
JUDGMENT OF THE CIRCUIT COURT
FOR PRINCE GEORGE’S COUNTY IS
AFFIRMED.  COSTS IN THIS COURT TO
BE PAID BY APPELLANT.