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Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust, Mortgage
Right of Redemption Period: No
Deficiency Judgments Allowed: Yes
Time Frame: Typically 90 Days
Public Notice: Notice of Default
Maryland is a lien theory state, meaning a borrower’s property is used as security for their loan. Titles in the state can be secured by either a mortgage or a deed of trust (trust deed), both serving the same purpose and having the same basic terms.
When a homeowner defaults on their loan, the property may be foreclosed upon. There are two types of foreclosures allowed In Maryland, which include judicial foreclosures and non-judicial foreclosures.
Although the state does not have a specific right of redemption statute, if a judge determines a property to be in default, they will allow the borrower a reasonable period of time to satisfy the debt before ordering the property be sold at auction.
Foreclosure laws in Maryland allow for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause nor assent to a judicial decree of foreclosure may be present in the loan documents.
The process is initiated with the lender filing a lawsuit against the borrower to obtain a decree of sale from a court with jurisdiction in the county where the defaulted property is located. The court will determine if the property is in fact in default and if so, will either order the debt to be satisfied, along with interest and other costs, within a reasonable period of time or if the debt cannot be satisfied, the court will order the property to be sold at auction.
In the event that an assent to a decree of foreclosure in contained in the loan documents, the borrower has given their assent to entry of a decree of sale if the property defaults. The lender must file a lawsuit against the borrower in order to foreclose, but a court hearing is not necessary to sell the property.
Maryland also allows for non-judicial foreclosures, also known as foreclosures by power of sale. In order for non-judicial foreclosures in Maryland to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default.
Non-judicial foreclosures allow for the property to be sold without court supervision, but in Maryland, a lender must still file an order to the court before foreclosure proceedings can commence.
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