Foreclosure Process in Maryland
Foreclosure is a legal process initiated by mortgage lenders to terminate the rights and/or access of property owners or borrowers in relation to real property. Lenders instigate foreclosure proceedings whenever borrowers default on the mortgage loan. The foreclosure process in Maryland can be one of three methods, depending on the type of security instrument issued with the mortgage loan documentation.
Other People Are Reading
-
Methods
-
The state of Maryland has both judicial and non-judicial foreclosures that are common in many other states. Maryland also recognizes a third foreclosure method called an assent to decree foreclosure. Judicial foreclosures require that the lender file a lawsuit against the borrower in court. Judicial foreclosures are necessary if the borrower is listed as the titled owner of the property. Non-judicial foreclosures are possible if the lender owns the property via a deed of trust and if the deed of trust contains a power of sale clause. An assent to decree foreclosure is possible if the security document tying the property to the mortgage loan includes a provision that specifies assent to an order of sale for the property if the borrower defaults on the loan.
Timing
-
Before a lender can file for foreclosure in Maryland, it must wait 90 days from the date that the loan went into default. Lenders must send a notice of intent to foreclose 45 days before filing the foreclosure with the court. Non-judicial foreclosures in Maryland require the lenders to file an order to docket with the court as part of the foreclosure process, but no court hearing is necessary. The time-line for a non-judicial foreclosure is further dictated by the notice requirements in the power of sale clause. An assent to decree foreclosure does not require a court hearing, but the lender must file a complaint with the court to foreclose on the property.
-
Notice
-
The notice requirements for a non-judicial, judicial or assent to decree foreclosure process in Maryland are the same unless the court rules differently or unless the original loan documents state alternative requirements. A notice of sale must be sent by certified and registered mail to the borrower not more than 30 or less than 10 days prior to the foreclosure sale date. The notice of sale must also be published in a county newspaper where the property is located at least once each week for three consecutive weeks before the sale. The first published notice can be no less than 15 days prior to the foreclosure sale date, and the last published notice can be no more than one week prior to the sale.
Foreclosure Sale
-
Maryland foreclosure sales can take place immediately outside the courthouse entrance, on the property to be foreclosed, or at the location listed in the notice of sale. The county sheriff or the person listed as the property trustee conducts the sale. Within 30 days of the foreclosure sale, the sheriff or authorized trustee must file a report of sale with the clerk of court. The clerk of court will issue a notice that includes a brief description of the property to state that the foreclosure sale will be ratified within 30 days of the notice date unless anyone can show cause to the contrary. The notice to ratify must be published once each week, or more, for three consecutive weeks in a county newspaper during the 30-day waiting period.
Deficiency Judgments
-
Lenders can petition Maryland courts for a deficiency judgment against the borrower if the foreclosure sale proceeds do not meet the outstanding balance on the mortgage loan. Lenders can file for a deficiency judgment for up to three years after the sale. Deficiency judgments are limited to the defaulted mortgage loan balance, after the foreclosure sale proceeds have been applied.
-
