Maryland Foreclosure Laws: Process, Timeline and Your Rights

Foreclosure goes through the circuit court in every case. A mortgage or deed of trust may contain a power of sale or the borrower's "assent to a decree," which lets a court-supervised sale proceed without a full lawsuit on the debt; the case starts with an "order to docket" (or a complaint to foreclose) filed in circuit court, and the sale takes effect only after the court finally ratifies it.

For homes of up to four units, the lender must send a written Notice of Intent to Foreclose at least 45 days before filing, stating the amount needed to cure and reinstate and including loss mitigation information (and a prefile mediation offer, if the lender offers one). The court papers must be served on the borrower, and a separate notice addressed to "all occupants" must be sent at the same time. Within 7 days of filing, the person selling the property must notify the Commissioner of Financial Regulation. Before the sale, notice of the time, place and terms must be published in a county newspaper once a week for 3 successive weeks (first publication at least 15 days before the sale, last no more than one week before), written notice must be mailed to the record owner by certified and first-class mail 10 to 30 days before the sale, and the county or city must be notified at least 15 days before the sale.

For homes of up to four units, a foreclosure case may not be filed until the later of 90 days after the default or 45 days after the Notice of Intent to Foreclose is sent (the court can allow an earlier filing in limited cases, such as fraud or no payments ever made). For an owner-occupied home, the sale may not occur until at least 45 days after service of the court papers with a final loss mitigation affidavit (or 30 days after that affidavit is mailed), or, if postfile mediation is requested, at least 15 days after the mediation is held or the mediation report is filed. For a home that is not owner-occupied, the sale may not occur until at least 45 days after service.

Yes. The borrower of residential property (up to four units) has the right to cure the default and reinstate the loan by paying all past-due payments, penalties and fees at any time up to 1 business day before the foreclosure sale. On request, the lender must provide the reinstatement amount and payment instructions within a reasonable time.

Yes, for owner-occupied homes. Postfile mediation before the Office of Administrative Hearings can be requested by filing a request with the court within 25 days after being served with (or mailed) the final loss mitigation affidavit, with a $50 filing fee; the lender may move to strike it only for good cause. Mediation must generally be held within 60 days, the lender must attend with settlement authority, and the parties review loss mitigation options. Lenders may also offer optional prefile mediation (housing counseling is required first, and a fee applies). The state housing department notes that missing the 25-day window means losing the chance for mediation.

The buyer at a foreclosure sale of residential property takes it subject to the rights of bona fide tenants (arm's-length tenancies, not the borrower or the borrower's close family, at roughly market or subsidized rent). A tenant with a lease may stay until the lease ends, unless the home is sold to a buyer who will live there; a month-to-month or at-will tenant, or one whose lease is ended for an owner-occupant buyer, must receive a written notice to vacate at least 90 days before it takes effect, by first-class and certified mail. When the case is filed, an "all occupants" notice must explain these rights. A foreclosure buyer cannot collect rent from a bona fide tenant until it gives the tenant written notice of where to pay.

Yes, with limits. Under the Maryland Contract Lien Act, a lien may be foreclosed in the same way as a mortgage or deed of trust with a power of sale, and the foreclosure must be brought within 12 years after the statement of lien is recorded. A condominium or homeowners association may foreclose its lien only if the amount secured consists of delinquent regular or special assessments (plus interest) and reasonable lien-related costs and attorney's fees not exceeding the delinquent assessments, and does not include fines or fees for collecting fines.

Yes, for most sales of single-family homes (up to four units). The seller must give the buyer either a Residential Property Condition Disclosure Statement or a Residential Property Disclaimer Statement on the single State Real Estate Commission form, on or before signing the contract. Even with the disclaimer ("as is"), the seller must disclose latent defects the seller actually knows of that threaten health or safety. A buyer who does not receive the form before signing may rescind within 5 days after receiving it (subject to limits tied to a mortgage application). Exemptions include new homes never occupied, foreclosure and sheriff's sales, and sales by a lender that acquired the home by foreclosure.

After a tax sale, the owner or anyone with an interest may redeem the property at any time until the right of redemption is finally foreclosed. The certificate holder generally may file to foreclose the right of redemption 6 months after the sale, or 9 months after the sale for an owner-occupied home, and only after sending two notices (at least 2 months after the first and 30 days after the second) stating that the owner may redeem and how much it would cost.

The Maryland Department of Housing and Community Development says to call 877-462-7555 if your mortgage is late, and lists free HUD-approved housing counselors who offer foreclosure counseling, the Maryland HOPE hotline (1-800-569-4287) and the national HOPE hotline (1-888-995-4673). It also lists the Pro Bono Resource Center of Maryland (410-837-9379) for legal help and explains how to request foreclosure mediation. Foreclosure scams can be reported to the Commissioner of Financial Regulation (1-888-784-0136) or the Attorney General's Consumer Protection Division (410-576-6550).