Maryland Foreclosure Laws

Questions

Answers

How are mortgage liens treated in Maryland?

Maryland is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.

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How are Maryland mortgages foreclosed?

In Maryland, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon. There is a non-judicial procedure to foreclose in Maryland but this process must also follow court approval. Maryland also has an assent to foreclosure which is a summary proceeding not requiring a specific hearing before the court permits a foreclosure sale. Non judicial foreclosure proceedings are also possible in Maryland with restrictions.

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What are the legal instruments that establish a Maryland mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement. Maryland also permits the use of deeds of trust. A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in Maryland?

Depending on the court schedule, it usually takes approximately 90-100 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy.

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Is there a right of redemption in Maryland?

No. Maryland has no post sale statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs.

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Are deficiency judgments permitted in Maryland?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan.

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What statutes govern Maryland foreclosures?

The laws that govern Maryland foreclosures are found in Maryland Rules, Title 14 (Sales of Property), Chapter 200 (Foreclosure of lien instruments). General information on mortgages and deeds of trust are found in Title 7 of the Real Property section of Maryland Statutes.


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