Maryland Foreclosure Laws

Foreclosure laws in Maryland can either be judicial or non-judicial. The Security of Instrument is a Deed of Trust and does not require appearance in court. Typical foreclosure process is 3 months.

Judicial And Non-Judicial Foreclosure Laws in Maryland

A Power of Sale clause determines if a foreclosure would take the judicial process or out-of-court proceedings. Non-judicial foreclosure takes place if the mortgage agreement, which is an agreement between the lender and borrower/homeowner, has a Power of Sale. Otherwise, a judicial foreclosure takes place.

For out-of-court foreclosure, the lender has the power to pursue foreclosing the property without court supervision. However, the lender should obtain a court order for the public auction or foreclosure sale. This can be acquired without a court hearing.

For judicial foreclosure, the lender is required to file a complaint against the borrower who is found to be in defaults with payments. This complaint or lis pendens should be filed in court. After that, the court will schedule a date for a hearing. The court favors the lender if there is sufficient evidence showing the borrower’s defaulted payments or if the borrower does not contest the lawsuit. This means that the borrower should pay the total amount owed to the lender in a given period of time. Failure to do so would result to a foreclosure sale of the distressed property.

Foreclosure laws in Maryland do not support after sale statutory right of redemption. A statutory right of redemption allows the borrower to reclaim a foreclosed property by paying, in full, the unpaid mortgage loan plus the costs.

A deficiency judgment can be obtained. This happens when a property is sold at a public auction for less than the amount of the mortgage loan. This means that the borrower should pay the difference between the amount of the property sold and the amount of the original loan to the lender.

The foreclosure sale, which is similar to that of a public auction, is conducted by a licensed auctioneer. After the foreclosure sale, a notice stating that public auction took place should be published in a local newspaper. Objections about the sale should be made within 30 days. If there are no objections filed, the court will confirm the sale and the property ownership will be transferred to the winning bidder.

Notice Of Sale

For 3 successive weeks, a Notice of Sale must be published in a local newspaper. At least 10 days before public auction, the trustee should deliver a Notice of Sale to the borrower and lien holders (if there are).

A sale may be postponed. However, a new Notice should be re-served in a manner similar to the original notice.