- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes, with
restrictions
- Primary Security Instruments: Deed of Trust,
Mortgage
- Timeline: Typically 90 days
- Right of Redemption: No
- Deficiency Judgments Allowed: Yes
In Maryland, lenders may foreclose on a mortgage or deed
of trust in default using either the judicial, assent to decree, or non-judicial
foreclosure process.
Judicial Foreclosure
In cases where the security instrument contains neither
a power of sale nor an assent to a decree, a lender must file a complaint
against the borrower and obtain a decree of sale from a court having jurisdiction
in the county where the property is located before foreclosure proceedings
can begin. The court will then determine whether a default has occurred.
If the court finds that a default has occurred it shall:
1) fix the amount of the debt, interest, and costs then due; and 2) provide
a reasonable time within which payment may be made. The court may order that
if payment is not made within the time fixed in the order, the property must
be sold to satisfy the debt.
Assent To Decree Foreclosure
Assent to a decree foreclosure is used when a provision
in the security document declares an assent to the entry of an order for the
sale of the property upon a specified default. Lenders who use the assent
to decree foreclosure must file a complaint to foreclose. However, it is not
necessary for a hearing to be held prior to the foreclosure sale.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power
of sale clause exists in a mortgage or deed of trust. A "power of sale" clause
is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes
the sale of property to pay off the balance on a loan in the event of the
their default. In deeds of trust or mortgages where a power of sale exists,
the power given to the lender to sell the property may be executed by the
lender or their representative, typically referred to as the trustee.
Despite the permission given in the power of sale clause,
lenders in Maryland must still file an order to docket before foreclosure
proceedings can begin. However, it is not necessary for a hearing to be held
prior to the foreclosure sale.
Foreclosure Guidelines
Unless otherwise stated in the original loan document or
ordered by the court, the following guidelines must be adhered to in any foreclosure
proceedings:
- A notice of sale must be published in a newspaper of
general circulation in the county where the property resides at least once
a week for three (3) successive weeks, with the first publication to be
not less than fifteen (15) days prior to sale and the last publication to
be not more than one week prior to sale. The notice of sale must also be
sent by certified and by registered mail, not more than thirty (30) days
and not less than ten (10) days before the date of the sale, to the borrower
at their last known address.
- The sale must be conducted by the person authorized to
make the sale (i.e. trustee, sheriff) and may take place immediately outside
the courthouse entrance, on the property itself or the location advertised
in the notice of sale, if different. The terms of the sale vary by process.
- If the sale is postponed, notice of the new date of sale
shall be published in the manner the original notice of sale was given.
- Within thirty (30) days after the sale, the person authorized
to make the sale must file a complete report of the sale with the court.
The clerk of the court will then issue a notice containing a brief description
to identify the property and stating that the sale will be ratified unless
cause to the contrary is shown within 30 days after the date of the notice.
A copy of the notice shall be published at least once a week in each of
three successive weeks before the expiration of the 30-day period in one
or more newspapers of general circulation in the county in which the report
of sale was filed.
- Lenders have a period of three (3) years to file for
a deficiency judgment, but it is limited to the balance of the loan in default
after the foreclosure sale proceeds have been applied.
More information on Maryland foreclosure laws.
