Granados v. Nadel, 104 A.3d 921

Background

Granados defaulted on a residential construction loan; servicers (SPS, then Quantum) and note transfers (to Wells Fargo) occurred during loss-mitigation efforts and HAMP trial plans.
Lender/servicer sent a Notice of Intent to Foreclose (NOI) on March 10, 2010; a first foreclosure was filed and voluntarily dismissed in July 2010.
Maryland amended RP § 7-105.1 (effective July 1, 2010) to expand NOI content and require loss-mitigation materials be sent with the NOI.
Trustees filed a second Order to Docket (new foreclosure) on February 24, 2011, attaching the March 2010 NOI rather than issuing a new, updated NOI.
Granados moved to dismiss and later excepted to ratification of the foreclosure sale, arguing the NOI was stale and noncompliant with the 2010 amendments; the circuit court denied relief and ratified the sale.
The Court of Special Appeals reversed: when a foreclosure is dismissed and a new proceeding is later filed after the statutory changes, the lender must send a new, compliant NOI before re‑docketing.

Issues

Issue	Granados' Argument	Trustees' Argument	Held
Whether a lender may rely on an NOI issued before dismissal of a prior foreclosure to support a subsequent Order to Docket filed after RP § 7-105.1 was amended	The March 2010 NOI was stale and failed to include information required by the 2010 amendments; a new NOI was required before the 2011 filing	The March 2010 NOI complied with the law when sent and was grandfathered; advisory guidance allowed use during transition, so reissuance was unnecessary	Court held trustees were required to issue a new, updated NOI after dismissal and before filing the second foreclosure; using the old NOI was insufficient and warranted reversal
Whether the alleged NOI defect was harmless and did not require vacating the sale	The NOI was inaccurate (wrong secured party, lacked updated loss-mitigation materials) and thus undermined the statutory purpose of pre-filing borrower notice	The borrower was aware of loss-mitigation options; Shepherd and other precedent permit upholding sales for harmless or immaterial notice defects	Court held the error was not harmless here because the NOI was not merely incomplete but inaccurate and outdated; sale must be set aside and the case dismissed without prejudice
Whether the Order to Docket itself (with attachments) cured the lack of an updated NOI	Granados: the NOI must be sent before filing to provide pre-filing notice; post-filing attachments cannot substitute	Trustees: attaching required information to the Order to Docket provided the same information to the borrower	Court held the Order to Docket cannot substitute for the statutorily required pre-filing NOI; that requirement would be circumvented otherwise
Whether appellate court should address separate request for a hearing on exceptions to sale	Granados requested a Rule 2-311 hearing; raised on appeal	Trustees opposed	Court did not reach this issue because reversal on the NOI ground rendered it moot

Key Cases Cited

Shepherd v. Burson, 427 Md. 541 (Court of Appeals of Maryland) (failure to identify every secured party in NOI does not automatically require dismissal when statutory purpose is satisfied)
Maddox v. Cohn, 424 Md. 379 (Court of Appeals of Maryland) (strict adherence to foreclosure procedural protections required post‑statutory reforms)
Julian v. Buonassissi, 414 Md. 641 (Court of Appeals of Maryland) (vacating ratification of foreclosure sale where defects in proceedings warranted reversal)
Deutsche Bank Nat. Trust Co. v. Brock, 430 Md. 714 (Court of Appeals of Maryland) (describing servicer functions and context of foreclosure proceedings)
Bachrach v. Washington United Co-op., 181 Md. 315 (Maryland Court) (appellate courts generally do not reverse sales for harmless errors in power-of-sale contexts)
Hurlock Food Processors, Inv. Assocs. v. Mercantile-Safe Deposit & Trust Co., 98 Md. App. 314 (Court of Special Appeals of Maryland) (harmless irregularity doctrine in foreclosure sale challenges)