- 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.
