Foreclosure Guidelines in Maryland

Highlights:

Judicial/ Non-Judicial Foreclosure: Available/ Available (Limited)

Right of Redemption / Deficiency Judgment: No / Yes

Timeline: 90 Days, Can vary depending on individual cases

Deed of Trust / Mortgage as Security Instruments: Deed of Trust, Mortgage

Both Judicial and Non-Judicial foreclosure is followed in Maryland, but some restrictions are applicable for Non-Judicial foreclosure.

Judicial Foreclosure Process:   

The Judicial foreclosure method is followed in cases where there is no power of sale or accent to decree clauses. In this method, the lender needs to file a case in a court of law (located in the county where the property is located), which determines if the mortgage loan was defaulted.

If the court determines that there has been a default, it gives sufficient time for the borrower to pay up their dues and it also fixes the interests and other costs to be paid by the borrower. If the borrower still does not pay, the court gives an order of decree approving the foreclosure sale.

If an assent to a decree clause in included in mortgage/ deed of trust document, the borrower has already consented to the foreclosure process. So, the lender can just file a foreclosure complaint and carry on the foreclosure process, often without any hearing.

Non-Judicial Foreclosure Process:   

Non-Judicial foreclosure method is followed if there is no power of sale clause in the mortgage/ deed of trust documents. In-spite of the Non-Judicial foreclosure process being followed, the lenders still need to file an order to docket, before the foreclosure process. A hearing, however is not necessary.

Actually, a power of sale clause authorizes the lender or their agent (referred to as Trustee) to carry on with the foreclosure process if the borrower happens to default on their loan and the following guidelines may be followed for the same.

An advertisement containing the notice of sale is required to be carried on at least in one newspaper that is in circulation in the county at least one day for three consecutive weeks. The first advertisement should be at least fifteen days before the date of actual sale and the last advertisement should be at least one week before the date of actual sale.

The notice of sale should also be sent to the borrower and any other person mentioned in the deed of sale/ mortgage document at their last known address between 10 and 30 days before the date of sale/ auction.
The foreclosure process can be conducted outside the courthouse or at another location as advertised in the notice of sale. This can be conducted by the authorized representative of the trustee or the sheriff. The sale can be postponed, but another notice needs to be carried on using the same procedure mentioned before.

Lenders can file for deficiency judgment but the amount they can claim is restricted to the balance of the loan in default after foreclosure proceedings.

After the sale, the authorized person who conducts the sale should file a report detailing the sale proceedings, with a court present in the same county as the property. A notice of sale is provided by the court which includes a clause that if there is no contrary cause, the sale will be ratified in 30 days. This notice needs to be advertised at least for one day for three consecutive weeks in a local newspaper within the 30 day notice period.

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