A Maryland lender holds a deed of trust on a property in Harford County. The borrower defaults, and the trustee conducts a non-judicial foreclosure sale. The sale is completed and the trustee files a report of sale with the circuit court. Before the court ratifies the sale, the borrower tenders full payment of the outstanding debt, fees, and costs. Which statement best describes the legal outcome under Maryland law?
Correct Answer
B) The borrower may exercise the equity of redemption and the court may refuse to ratify the sale, allowing the borrower to reclaim the property
This is a high-difficulty trap question about Maryland's unique foreclosure ratification requirement. In Maryland, even after a non-judicial trustee's sale is conducted, the circuit court must ratify the sale before title passes irrevocably to the purchaser. During the period between the sale and court ratification, the borrower retains the equity of redemption — the right to stop the foreclosure by paying the full outstanding debt, fees, and costs. If the borrower makes a valid tender before ratification, the court may decline to ratify the sale, effectively unwinding it and allowing the borrower to reclaim the property. This is a uniquely Maryland procedural protection.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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