On the same day Gov. Martin O’Malley signed a slew of other high-profile bills into law (with a notable exception) he also approved a new law limiting the time banks can seek a deficiency judgment following a foreclosure.
The bill, which narrowly made it out of a conference committee before the 2014 General Assembly session ended, reduces the time a lender can seek a deficiency judgment from 12 years to three years. A deficiency judgement is sought when a foreclosure sale doesn’t cover the balance and interest on a mortgage.
Initially consumer advocates fought for a six-month window to file, but said they were happy with the limit approved by the legislature.
The bill was signed into law as Maryland held on to the second highest foreclosure rate in the nation for the third straight month.