Tag Archives: Maryland deficiency judgment

New Deficiency Judgment Rules in Maryland

Deficiency judgment rules in Maryland are about to change, thanks to the passage of a new law in the recent legislative session. A deficiency judgment is the process by which a lenders seeks payment for any funds that weren’t accounted for in a foreclosure sale. As an example, if a home is valued at $100,000, and sells for $75,000 in a foreclosure sale, the lender can seek a deficiency judgment to file for the additional $25,000 in value that the sale didn’t bring.

Previously, the lender had up to 12 years to file a deficiency judgment and collect this outstanding mortgage debt. This extended timeline made it difficult for homeowners who had been through foreclosure to move on, as they could never be sure if the lender would seek a deficiency judgment 5, 10, or even 12 years out.

The new law shortens this timeframe significantly, reducing it from 12 years to 3 years. The new law also makes a deficiency judgment the only method by which a lender can seek payment on an outstanding mortgage. The law will go into effect on July 1, 2014. Another bill which would have put a halt on all foreclosures in the state for 6 months did not pass.

Maryland foreclosure bill

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Are you interested in learning more about selling your home fast? Our ebook has a ton of great information for you. We also have an ebook with information on how to avoid foreclosure, available for download here. They’re both free, so give them a look. You can also connect with Grays Home Solutions on FacebookTwitterGoogle+, and LinkedIn for more real estate made simple.