Publication : Brochures
FORECLOSURE PROCEEDINGS IN MARYLAND (Revised June 2008)
Receiving notice that your house is about to be foreclosed upon is one of
the most traumatic things you can go through. However, when you sign your mortgage
or deed of trust at the real estate closing and it is recorded in your County’s
Land Records office, you give your lender the right to foreclose on the property
if you default on the loan or fail to repay the loan according to the terms
of the loan. A new foreclosure law went into effect in Maryland on April
4, 2008 and any foreclosure action filed after that date must comply with the
new law. The foreclosure process and your rights in that process under
the new law are outlined below.
WHAT WILL HAPPEN IF MY PROPERTY IS GOING INTO FORECLOSURE?
Before the foreclosure is filed
Before a foreclosure action is filed, you as the borrower and property owner
should have received notice from the lender that there is a problem with
your loan account and from the lender’s attorney that there is a default
under the terms of the loan. Many mortgages require the lender to give notice
of the default and of your right to remedy the default before filing foreclosure.
Do not ignore or delay in responding to any written communication from your
mortgage lender. The sooner you contact your lender, the greater the chance
you can work out a solution to your situation.
In Maryland, before the lender can file a foreclosure case against your property,
the lender must:
- Wait 90 days from the date that your loan is in default; and
- Send you a Notice of Intent to Foreclose 45 days before the foreclosure
case is filed.
- The Notice of Intent to Foreclose will provide you with important information
about why your loan is in default, the amount you owe to bring your loan
current, the last payment received, contact information for the lender
or secured party, for the mortgage servicer that collects your mortgage
payments and for the department that can help you work out your default
(the loss mitigation department).
Filing the foreclosure case
To begin a foreclosure case, the lender must file the foreclosure with the
Circuit Court in the county in which the property is located. The lender
must file the following documents with the court:
- Statement of debt, under oath, which itemizes the entire amount the lender
claims is due under the loan. This will usually include principal, interest,
late charges, attorneys’ fees and all other charges that the borrower
is responsible for under the mortgage;
- Certification that the property owner is not a member of the military service.
Under a federal law, commonly known as the Soldiers’ and Sailors’ Civil
Relief Act, members of the military service have specific rights when lawsuits
are brought against them (including foreclosure proceedings) since they may
not be in the U.S. due to a military assignment and unable to adequately
defend their interests;
- If you are a member of the military service and find a property
owned by you is the subject of a foreclosure action, you should ask
an attorney what additional rights you may have as a result of this
- Statement, under oath, that indicates the date of default, the nature of
the default and the date the Notice of Intent to Foreclose was sent;
- A copy of the Notice of Intent to Foreclose;
- Original or certified copy of the mortgage or deed of trust;
- Copy of the debt instrument and an affidavit of ownership;
- Original or certified copy of the assignment of the mortgage if applicable;
- The mortgage lender and originator’s license number if applicable;
- A uniform Notice regarding the filing of the foreclosure action
Serving the Property Owner
The lender must personally serve you with all the papers filed when the case
was docketed with the court. If the lender is unable to serve you after
two good faith attempts on two separate days, the lender may file an affidavit
with the court describing the attempts made to serve you and the lender may
then serve you by sending you a copy of the court papers, by both certified
and first class mail AND by posting the court papers on the property.
Before a Foreclosure Sale can be held
Before a foreclosure sale can be held, the lender must:
- Wait 45 days from the time the defendant was served.
- Publish a Notice of Sale for three successive weeks in a newspaper of general
circulation in the county where the action is pending. The first advertisement
should be published not less than 15 days prior to the date of sale and the
last advertisement should be published not more than 7 days prior to the
date of sale.
- Send a notice of the date of sale to the homeowner by certified and first
class mail of the time, place, and terms of the pending foreclosure sale.
This notice must be sent no later than 10 days prior to the scheduled sale
date. Failure to receive the notice or to sign for it will not stop
- Accept from the homeowner payment of the funds due to cure the default
up to one business day before the sale. Payment of this amount which
includes missed payments, late fees and costs will stop the foreclosure sale
if it is made one business day before the sale.
- Note: The secured party or the agent must provide, upon request, the
amount necessary to cure the default and reinstate the loan and instructions
for delivering the payment
IS IT TOO LATE TO PREVENT THE SALE OF MY PROPERTY?
When you are facing foreclosure, it does not mean that all hope of saving your
property is lost. If you have not spoken with your lender, contact
your lender immediately and ask for the loss mitigation department
of your lender to determine if your default can be cured under a plan.
Before the sale occurs, you have the right to go before the court to prove
that you did not default on your loan and stop the sale. You may also go before
the court to ask that the sale be stopped if you can prove that the lender
committed fraud in obtaining the mortgage or they have violated certain laws
when your mortgage was made. You may also have rights and defenses if
the lender fails to follow the requirements of the foreclosure law. You
should consult an attorney for advice and assistance if you believe you have
a defense to the foreclosure.
If your lender is unwilling to work with you, filing a Chapter 7 or 13 petition
in bankruptcy may be beneficial. A bankruptcy filing before the sale will stay
or stop the sale. Filing bankruptcy after the hammer comes down at the
auction will lose the house unless the sale was improperly conducted and you
timely object to ratification. Generally, a Chapter 7 filing will provide you
with a three-month opportunity to cure your default and, if you can afford
your mortgage and a plan payment, a Chapter 13 filing will give you up to five
years to bring your mortgage current and pay other debts once the plan is confirmed.
Filing a bankruptcy petition is complex; credit counseling is required and
most attorneys need three or four days to do so.
If someone approaches you to help stop your foreclosure, have any documents
given to you reviewed carefully before you sign them or before you give any
money to anyone. If you need help, contact the State’s HOPE hotline
at 877-462-7555 to get help from its foreclosure prevention assistance network
and nonprofit housing counselors throughout the state.
SALE OF THE PROPERTY
If a sale does take place, the property will be sold through a public auction
open to anyone who desires to make a bid. Public auctions are usually held
on the property or at the courthouse in the county where the property is
located. The trustee must make a report regarding the sale to the court
including an accounting of the sale. After the sale has taken place,
but before the court has ratified the sale, you may file objections if the
sale was improperly conducted. Only after the court ratifies the sale
can the new owner petition the court to have you evicted from the property
if you are still living there.
The Public Awareness Committee of the Maryland State Bar
Association has prepared this information. It is intended to inform the public
and not serve as legal advice.
©1986 MSBA, Inc. Revised 2000, 2003, 2007, 2008
All rights reserved. No part of this work may be reproduced in any form
without written permission from the Maryland State Bar Association, Inc.