In a case of first impression, the Maryland Court of Appeals issued a decision at the end of April 2021 in favor of the CLC’s clients, who challenged the unfair and deceptive practices of certain mortgage actor(s) that unlawfully threatened them with eviction at times when the mortgage actors were not permitted to carry out the eviction.  

The case, Wheeling v. Selene Fin. LP, No. 27, SEPT. TERM, 2020, 2021 WL 1712318 (Md. Apr. 30, 2021), makes clear that it is unlawful for protected residents to be threatened with eviction without any prior reasonable investigation by the party claiming the right.  Specifically, Mr. & Mrs. Wheeling, along with their children, were tenants in a residential home when their landlord’s mortgage company threatened them with eviction even though: (i) the Wheelings were current on their rent; and (ii) the mortgage company had not even commenced foreclosure proceedings and therefore had no right to threaten anyone with eviction.  Similarly, Ms. Rodriguez was a protected former homeowner and was preparing to leave her home.  However, the mortgage company and its agent threatened to evict her before the actual date scheduled for the eviction by the local sheriff’s office.  Based on the mortgage company’s threat, Ms. Rodriguez was fearful that she would come home from her medical treatments to find her possessions on the street.

Under Maryland common law, landlords and other persons such as mortgage actors were previously permitted to threaten imminent eviction without any reasonable investigation before making the threat.  The Court of Appeals affirmed that law in Nickens v. Mount Vernon Realty Grp., LLC, 429 Md. 53 (2012).  However, the Maryland General Assembly exercised its constitutional right to check the judicially made common law in 2013, and passed a remedial statute for the express purpose of overruling the Nickens case.  It is not frequent that the Legislature exercises this constitutional authority to check the judicial branch, but it has a duty to establish the public policy for the State of Maryland that the judicial branch must follow.

The Consumer Law Center is pleased the Court of Appeals agreed with our arguments and upheld the remedial laws exacted to protect residents from unlawful eviction before any reasonable investigation occurs. Residents should not be subjected to the fear and anxiety of losing their home at a time when the law does not permit it.  Further, mortgage actors like those in the Wheeling case should be held accountable for their unfair and deceptive actions.   Not only are consumers harmed by such conduct but also honest mortgage actors who choose not to cross the line and ignore the laws governing their business; all mortgage actors should follow the same laws and one should not gain a competitive advantage over another by simply ignoring the law.  It should also be noted that the agency in Maryland which licenses mortgage actors had previously provided guidance about the Legislature’s new law, but the defendants in the Wheeling case apparently disregarded that advice leading to the litigation.

The Consumer Law Center’s argument in Wheeling was supported by the Public Justice Center, the Consumer Protection Division of Office of the Attorney General for the State of Maryland, Civil Justice Inc., and Consumer Credit Counseling of Maryland and Delaware.