Effective April 14, 2014, Maryland's House Bill 595 authorized a certified Community Development Financial Institution (CDFI) to step in prior to a foreclosure and purchase an owner-occupied residential property, and then transfer the property back to the original owner.
It also blocks the use of a Affidavit, Statement, Agreement or Addendum from preventing or hindering a sale to a CDFI. Such contractual elements will be deemed unenforceable and the sale to a CDFI will be allowed.
CDFI's are funded through a federal program, run by the Treasury, whose intent is to assist underserved market areas. The bill exempts the transaction from recordation and transfer taxes and is designed to reduce the principal owed, reducing the amount of the monthly mortgage payments by up to 40%.