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Both the Non-Judicial and Judicial Foreclosure processes are used in Maryland. The Judicial Foreclosure process is used when the original loan documents do not contain a “power of sale” clause. The loan documents also must not contain an assent to a decree of foreclosure.
If neither of these clauses a present, the lender must sue the borrower in court to obtain a decree of sale. If the court rules that a default has occurred, it will fix the amount due and give the borrower a reasonable amount of time to cure the default.
The Non-Judicial Foreclosure process is used when the loan documents contain a “power of sale” clause, authorizing the lender to sell the property in the event the borrower defaults. The lender must file an order to the court's docket before proceedings can begin, but no hearing is required.
A copy of the notice of sale must be published for three (3) consecutive weeks before the sale. Also, the borrower must be served a copy of the notice of sale by registered mail not more than thirty (30) days before the sale and not less than fifteen (15) days before the scheduled sale date.
The person who conducts the sale must file a report with the clerk of the court within thirty (30) days after the sale of the property. The clerk issues a notice that the sale will be ratified within thirty (30) days, unless cause is shown to invalidate the sale. This notice must also be published for three (3) consecutive weeks during the thirty (30) day period.
The lender has the right to sue the borrower for a deficiency judgment in the event the property does not sell for an amount to cover the loan balance due plus costs. The deficiency suit must be filed within three (3) years.
Maryland allows sale dates to be postponed, but the new sale date must be published in the same manner as the original notice of sale. |
