Maryland Foreclosure Laws for Personal Property
- In a judicial foreclosure, the lender must file a complaint through the court system. If the court agrees that a default has occurred, it sets the fixed amount of back payments, interest and fees due and sets a time period for the property owner to pay the debt before the property is sold. A nonjudicial foreclosure is one in which the mortgage includes a power-of-sale clause, which means the property owner pre-authorizes the sale of the property without the involvement of the court should he default on the mortgage. For mortgages that include assent-to-decree language, the lender must still file a complaint to foreclose; but like the nonjudicial foreclosure, there is no hearing before the sale.
- The lender must send the property owner a notice of intent to foreclose at least 45 days before the foreclosure process begins in Maryland. Sales must be advertised in a local paper no fewer than 15 days prior to the day of the sale. The sale must be conducted by the sheriff's office or a trustee at the courthouse at the property site or any other location listed in the advertisement. Within 30 days of the sale, the sheriff's office or trustee must submit a report to the court, and the clerk of the court must advertise a notice stating that the sale will be ratified within 30 days.
- Foreclosures typically take 90 days to complete in Maryland. Property owners have the right to go before a judge prior to the sale to prove they did not default on the mortgage or that the lender committed fraud relating to the mortgage in order to stop the sale. Maryland property owners have up until the business day before the sale to pay overdue payments and related fees to stop the foreclosure sale.
- In Maryland, bona fide tenants, or those who began renting the property prior to the foreclosure transfer of title, must be given 90 days notice to vacate the property after the transfer of title. If the property is acquired by an investor who does not intend to live there or if the property is taken back by the lender, tenants with a valid term lease have the right to stay in the property until the lease is up. Tenants who do not have a bona fide lease can be evicted from the property as soon as the new owner takes possession. After the time frame is up a judge can permit a local law enforcement officer to remove the tenant's belongings and change the locks.
