Jones v. Rosenberg

Jones v. Rosenberg, 178 Md. App. 54, 65-66, 940 A.2d 1109, cert. denied, 405 Md. 64, 949 A.2d 652 (2008) dealt with a foreclosure sale on a subprime mortgage. The appellees sent appellants notice "that the foreclosure action had been filed and that an auction sale of the property would occur on November 29, 2006." Id. at 61. On November 20, 2006, the appellants filed a motion for an emergency injunction to stop the foreclosure sale and to quash service, but did not attach a supporting affidavit. Id. The court never ruled on the motion and the foreclosure sale was held. Id. The appellees filed a report of sale with the court on December 6, 2006, and the court "issued a notice that the sale would be ratified on January 5, 2007." Id. On December 21, 2006, before the ratification of the sale the appellants "filed a second motion for an emergency injunction to stop the foreclosure sale or, in the alternative, to stop the ratification of the sale." Id. The motion also stated exceptions to the foreclosure sale, and set forth therein numerous objections, including "lack of an opportunity to cure the default;" "lack of notice of the foreclosure sale by registered mail;" and "that appellants had filed suit against appellees in federal court on November 17, 2006, alleging that the deed of trust violated federal mortgage laws." Id. A hearing on the motion occurred on February 27, 2007, at which time the "appellants requested discovery of the original loan documents, including the original deed of trust, in order to determine whether the mortgage was usurious and improper, as well as discovery of whether appellants received actual notice of the foreclosure sale." Id. at 63. The court "granted the appellees' motion to quash the appellants' requested discovery, overruled the appellants' exceptions to the foreclosure sale, ratified the sale, and ordered that the matter be referred to the court auditor for an accounting." Id. The appellants next filed a motion to alter or amend the judgment of ratification of the foreclosure sale pursuant to Rule 2-535, alleging fraud or irregularity in "that the foreclosure action was improper because appellees had violated the Truth In Lending Act (TILA), 15 U.S.C. 1601, et seq., and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601, et seq., and that, with additional discovery, appellants could prove the violations." Id. This motion was also denied. Id. at 64. On appeal, the Court held that the appellants' first motion for an injunction to stop the foreclosure sale did not comply with the requirements in Rule 14-209(b), and that their second motion for an injunction "was filed after the foreclosure sale and, therefore, was untimely for purposes of halting the foreclosure sale." Id. at 65-66. "Having failed to file a proper pre-sale injunction to the foreclosure sale under Rule 14-209(b), the appellants' next recourse was to file exceptions to the sale under Rule 14-305(d)." Id. at 68. In discussing the appellants' exceptions, we explained that "after a foreclosure sale, a debtor's right to redemption ends and a debtor may file exceptions challenging only procedural irregularities in the foreclosure sale under Rule 14-305(d)." Id. at 69. The Court then reasoned that "the only challenge relating to procedural irregularities in the foreclosure sale . . . was that the appellees failed to send notice by registered or certified mail." Id. Concluding that the appellants had proper notice of the sale, we held that the trial court "did not err in overruling appellants' exceptions to the foreclosure sale and ratifying the foreclosure sale." Id. at 70-71. Regarding the appellants' argument that they "made a showing of fraud or irregularity" in support of their motion to alter or amend, the Court stated that such motions are only granted upon a showing of extrinsic fraud, i.e., fraud that prevents an adversarial trial. Id. at 72-73. The Court held that the appellants' motion "contained no probative evidence showing extrinsic fraud," and thus affirmed the judgment of the circuit court. Id. at 74.