Can the lender come after you for the rest? Deficiency judgments in Maryland

Deficiency rules in Maryland, point by point

• The auditor's report sets the shortfall

  Before the court ratifies the report

  After the sale is ratified, a court auditor states how the sale money was applied and what is still owed. Maryland's appeals court has said that once the audit is ratified, the fact and amount of the deficiency are settled and cannot be argued again, so raise any objection to the report in the foreclosure case before it is approved.

  Md. Rule 14-216(b); Pulliam v. Dyck-O'Neal, Inc. (Md. Ct. Spec. App. 2019)

• The lender has three years to file

  Within 3 years after final ratification of the auditor's report

  A secured party or another proper party in interest may file a motion for a deficiency judgment if the sale money, after allowed costs, did not cover the debt and interest. A motion filed after the three years is late.

  Md. Rule 14-216(b)

• You must be served and get time to respond

  30 days after you are served

  The motion must be served on you the way a new lawsuit is served, with a notice saying you have 30 days after service to respond, or a longer time if the rules for answering a complaint allow it.

  Md. Rule 14-216(b)

• A debt buyer can file it

  Any time within the 3 years

  The right to a deficiency can be sold. In the Pulliam case the note was transferred twice after the foreclosure, and a debt collector got the deficiency judgment, although the court found its interest math was wrong.

  Pulliam v. Dyck-O'Neal, Inc. (Md. Ct. Spec. App. 2019)

• Short sale or deed in lieu

  Before you sign

  We did not find a Maryland statute that decides whether you owe a balance after a short sale or deed in lieu. The written agreement with your lender controls, so ask for a written release of any remaining debt before you sign.

• How long it lasts and wage limits

  12 years

  An action on a judgment must be brought within 12 years. If wages are garnished, Maryland protects the greater of 75 percent of your disposable wages or 30 times the state minimum hourly wage for each week, plus medical insurance payments taken out of your pay.

  Md. Code, Cts. & Jud. Proc. § 5-102(a)(3); Md. Code, Com. Law § 15-601.1

• If you are served with a deficiency motion

  Within 30 days

  Do not ignore it. Check the date the auditor's report was ratified, whether the filer shows it owns the debt, and how interest and fees were figured, and file a response on time. Maryland Legal Aid or a lawyer can help.

  Md. Rule 14-216(b)

The short answer in Maryland

Common questions in Maryland