Detailed Answer
After a Maryland foreclosure sale, any funds remaining above the mortgage payoff, court costs and liens become surplus. The court holds these funds until a proper claim is made. To recover surplus proceeds, follow the steps below under Maryland law.
- Verify eligibility and timing. Under Md. Code, Real Property §7-308(d) (link), you must file within three years of the foreclosure sale date. Missing this deadline may forfeit your claim.
- Obtain foreclosure sale records. Request the docket entries, order of sale and certificate of distribution from the circuit court clerk where the foreclosure occurred. These documents show the sale date, sale price and surplus amount.
- Prepare a Petition for Surplus Funds. Draft a petition captioned with the foreclosure case number and court. Include:
- Your name and contact information
- Property address and case details
- Statement of your entitlement to surplus funds
- Amount you allege is due
- Gather supporting evidence. Attach copies of the foreclosure order, certificate of distribution, title documents and any proofs showing your interest in the surplus funds (for example, overpayment by the borrower or junior lienholder status).
- File the petition. Submit your petition and exhibits to the clerk of the circuit court where the foreclosure sale was held. Pay the filing fee (varies by county).
- Serve interested parties. Deliver a copy of your petition and notice of hearing to all parties with recorded interests, such as mortgagees, lienholders or the foreclosure purchaser, according to Maryland Rule 14-305.
- Attend the hearing. The court will schedule a hearing to evaluate your claim. Present your evidence and explain your legal basis. If the court finds in your favor, it will issue an order directing the clerk to pay you the surplus funds.
Helpful Hints
- Confirm the foreclosure sale date and surplus amount early to avoid missing deadlines.
- Keep certified copies of all court documents and recording instruments.
- Check local circuit court websites for filing fees and scheduling procedures.
- Consult courthouse self-help centers for procedural forms and guidance.
- Consider hiring a Maryland attorney if you encounter complex title or lien issues.
Disclaimer: This information is for general education only and does not constitute legal advice. Consult a qualified attorney for advice about your specific situation.