Maryland Preforclosure Laws

[Renee Pie]

I've been reading and reading and reading about strategies and all things REI. I've learned about preforclosure and subject-tos, etc.

But, I've also learned that Maryland has squirrely laws about such things.

As a MD investor, what should I be aware of? What is different about our state laws vs. most states? At what point should I step away from a seller's foreclosure situation?

In terms of subject-tos, how are banks reacting to these now days? What if a seller includes it in a bankruptcy?

[Deirdre Brown]

The best thing you can do is read the statue yourself. It is Maryland Annotated Code 7-105.

When issuing title insurance I look at the foreclosure paperwork and make sure that the statute was followed to the letter. This is how foreclosure attorneys challenge foreclosures - the statue not being followed. Notice of service not executed properly or in the correct time frame. Documents not including the required language etc.

If the property is included in the bankruptcy there is an automatic stay and it is a federal crime to try and collect a debt that is in bankruptcy protection. However, in most cases the lender petitions the court for a lifting of the stay for the real property. The stay is normally lifted and the foreclosure proceeding can proceed. Many of my investor clients have purchased (short sales) at this stage. The bank, the bankruptcy trustee and the courts want the debt removed.

Good Luck.