Property Mortgage Laws in Maryland

Maryland is referred to as a lien theory state wherein a property stays as guarantee for the loan in question. A property is placed under the lien through a document referred to as a mortgage.

A judicial foreclosure process in which a court issues the final ruling on a foreclosure is followed by lenders in Maryland. A publicly notified sale is then used to sell the property. A complaint in combination with a lis pendens (a document that is recorded to offer a notice publicly about the property in foreclosure) needs to be filed in a court.

A non-judicial process is also present in Maryland, but this process is subject to approval from the court. An assent to foreclose also exists in Maryland, where proceedings to summarize are not required at specific hearings before a court permits foreclosures sales.

LEGAL INSTRUMENTS

The legal documents are referred to as a mortgage or note, and a security agreement in cases of commercial transactions. The security agreement and the mortgage are merged from time to time. The filing of a mortgage is done to validate the loan in question and its repayment terms, which are included in the note.

TIME PERIOD

It can take around 90 to 100 days, with the schedule of the court kept in mind, for a foreclosure that is not contested get into effect. If bankruptcy is filed for by the borrower, or if the action is contested and the hearing is sought to be postponed, there can be a deferment in the process.

RIGHT OF REDEMPTION

No statutory right of redemption, where the owner of a foreclosed property can claim the property post-sale by paying the costs and the remainder of the loan amount in full, exists in Maryland.

DEFICIENCY JUDGMENTS

If a foreclosure property ends up selling for lesser than the amount which is secured by the said mortgage, a deficiency judgment can be acquired by the lender. The borrower then ends up owing to the lender the amount that remains when the amount on the original loan is subtracted from the sale amount.

STATUTES

Foreclosures in Maryland are governed by laws that are part of the Maryland Rules, Title 14 (Sales of Property), Chapter 200 (Foreclosure of lien instruments). Information in general about deeds of trust and mortgages are part of the Real Property section of Maryland Statutes.

For the provisions of power of sale in relation to mortgages involving non-residential properties Title 33 (Mortgages of Real Property), Chapter 9, §501-§553A should be referred to.