Marvin Mandel, Governor                       1937

This bill requires that only persons who are residents of the
State of Maryland and only certain corporations, shall be permitted
to act as trustees of deeds of trust conveying real estate located in
Maryland for the purpose of securing a debt.

As I stated last year when I vetoed a bill similar to Senate Bill
209, it is extremely undesirable to enact a law which more severely
restricts the rights of non-resident trustees than before, especially in
light of recent Maryland legislation which has considerably extended
the rights of non-residents to serve in other fiduciary capacities in
Maryland. The enactment of this bill would represent a major step
backward in Maryland's policy toward her neighboring States.
Furthermore, this bill would invite neighboring States to impose
similar restrictions on Maryland residents.

Although S. B. 209 has corrected some of the defects found in
last year's bill, there are still several problems of concern to attor-
neys. The chief one relates to the status of a deed of trust having a
non-resident trustee. Is such deed valid to pass title? Should it be
recorded? If it should not be recorded, there are no guidelines or
presumptions for the clerks of court to use in determining the resi-
dence of the trustees. If a deed of trust not listing the residence
of the trustees is to be recorded, is it the obligation of the title
searcher or real estate lawyer to make an independent determination
of the residence of the trustees ? What happens if the residence of the
trustees change? Does the bill mean that the trustees must be resi-
dents at the time the document is executed or at the time the document
is recorded or at the time the document becomes effective in fore-
closure? None of these questions are answered by S. B. 209. More-
over, there is no definition of "resident" in this bill. I am concerned
that such unanswered questions could lead to utter confusion for mem-
bers of the bar and the Courts. Such a result could possibly curtail
the availability of money in Maryland from lenders.

At a hearing which I held on the bill the only proponent of
the bill present stated that its chief purpose was to protect the public
from non-resident trustees who, it was said, are immune from service
of process. However, Maryland's "long arm statute" as found in
Article 75, Section 96 of the Annotated Code of Maryland, would give
a Maryland court jurisdiction over such trustees. Another asserted
purpose of the bill was to protect the public from exorbitant "trustees
release fees" demanded by non-resident trustees. House Bill 439,
which was enacted by the General Assembly and signed by me on May
26, 1972, prohibits any release fee in excess of $15 unless the fee is
specified in the instrument. In essence, I believe that Maryland law
presently protects the public in the areas that encompass the under-
lying purposes of the bill.

The Section on Real Property, Planning and Zoning of the Mary-
land State Bar Association, in a memorandum which is attached
herewith, has urged that I veto Senate Bill 209 for the above-men-
tioned reasons as well as for others. Also several attorneys specializ-
ing in estates and trust have similarly requested that the bill be
vetoed.

For these reasons, I believe Senate Bill 209 must be vetoed.

Sincerely,
/s/ Marvin Mandel,

Governor.