Foreclosure Laws in Maryland (MD)Topic: Foreclosure
The usual time from beginning of foreclosure process, to the sale by the auctioneer in this state is ninety days. The home owner is not allowed a right of redemption in this state. A right of redemption is a period of time following the sale of the home, during which the former home owner is given the right to regain ownership of the property. Typically the price for this option is the winning bid price. In some states there are additional fees or cost or interest added to the cost of exercising your right of redemption. The time period can vary anywhere from 10 days to more than a year. In Maryland though, once the home is sold at auction, the ownership of the home cannot be regained through a right of redemption.
Maryland does allow the banks to seek additional money above that which has generated from the sale of the home. This is called a deficiency judgment. The amount of money they are allowed to go after is the difference between what the house sold for and what was owed on the loan. Most people who lose their home in a foreclosure auction do not have other resources with which to pay that additional some of money. In most instances banks, understand this and deficiency judgments are not pursued very often. If the bank has reason to believe that the former home owner does have additional money assets or property from which they could successfully attain a deficiency judgment, the will go for it. The banks are allowed three years following the sale of the home to file a deficiency judgment. When there is a case where the deed of trust or mortgage contains neither a power of sale clause, nor has assent to a decree, the bank must pursue the foreclosure through courts.
First the bank needs to file a complaint against the home owner who is having difficulty making his house payments. Once this has been done the court will most likely issue a decree of sale. At this point the court will decide if a default has occurred. When the court has made this determination, it then tabulate and put forth the amount of debt, and costs and interest that the homeowner must pay. The court will also give a time period during which the payment of this amount of money is to be paid. After this assigned time period has past and if during this time the money has not been paid, then the house will be ordered to be sold. Assent to decree foreclosure is used when the deed of trust or mortgage contains an assent to the entry of an order for sale of the home when default has occurred. When this type of foreclosure is used, the bank must file a complaint with the court. Even through this step is required the actual holding of a hearing before the sale does not need to take place. Maryland does allow for non-judicial or out of court foreclosure. When a deed of trust or mortgage contains a power of sale clause, this allows the bank to skip over the full court process on its way to the sale date. It saves the bank time and money to use non-judicial foreclosure, so it is the 1st choice to be used whenever it can be done. Maryland still requires that the bank file an order to docket before foreclosure proceedings can begin. But, as with assent to decree foreclosure, no hearing needs to be held before the sale can take place. Very specific instructions on the sale of the home can be written into the power of sale clause. When they are detailed in their instructions, must be followed. This doesn't happen very often however, so the regular method of foreclosure is usually followed. Also, if judicial foreclosure is used, then the court may give specific instructions, that are out of the ordinary as well.
Otherwise, the usual foreclosure process begins with the notice of sale must be advertised in a newspaper that has circulated in the county where the home is located. This ad must be run once a week for three weeks. The 1st of these ads is to be run no sooner than fifteen days before the scheduled sale date. The 1st of these ads cannot be placed any further out from the scheduled sale date than one week. This same notice of sale must be sent both by certified and registered mail. The time frame required for this letter to be mailed is no sooner than ten days before the scheduled sale date and no farther out from the scheduled sale date that thirty days.
The sale of the home must be conducted by either the sheriff of the county where the home is located or the banks lawyer, referred to as the trustee. This sale can be held just outside the courthouse doors of the county where the house is located, on the property itself or at a different location that was clearly stated in the notice of sale. If the bank chooses to postpone the sale, it may do so. The date, time and manner of the new sale must be advertised in the same way as the original sale was done. In the first thirty days following the sale the sheriff or trustee is required to make a complete report of the sale to the court. At this point the clerk of the court will issue a notice. This notice must contain a description of the property. It must further state that the sale will be ratified in the next thirty days, unless cause to the contrary is shown in that period. This notice must be advertised or published once a week, three weeks following the sale. As when the notice of the upcoming sale date was run in the paper, that has circulation in the county where the home is located.
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