Foreclosure Surplus Acquisitions - Financial RegulationLast reviewed or updated: December 29, 2022
A Foreclosure Surplus Acquisition is a transaction involving the transfer, sale, or assignment of the surplus remaining and due the homeowner based on the audit account during a foreclosure proceeding. A Foreclosure Surplus Purchaser is a person who acts as the acquirer by assignment, purchase, grant, or conveyance of the surplus resulting from a foreclosure sale, including any person who acts in joint venture or joint enterprise with one or more acquirers.
A Foreclosure Surplus Acquisition must be accomplished through a written contract, which must contain certain provisions and information pursuant to Maryland law. Refer to Md. Code Ann., Real Prop. §7-314 for specific requirements regarding the content of a Foreclosure Surplus Acquisition contract. One specific requirement is the right of a homeowner to rescind any contract with a foreclosure surplus purchaser at any time within 10 days after the statement of audit account of the foreclosure sale, which must be contractually provided for through a Notice of Recession that accompanies a Foreclosure Surplus Acquisition contract. Refer to Md. Code Ann., Real Prop. §§ 7-314 & 7-315.
NOTE: Rescission occurs when the homeowner delivers, by any means, written Notice of Rescission to the address specified in the contract, with a copy to the auditor. As part of the rescission, the homeowner must repay any consideration received directly or indirectly, together with interest calculated at the rate of 8% a year. The repayment of consideration and interest by the homeowner shall be incorporated by the auditor into the revised statement of account filed with the court and, upon ratification of the amended audit, distribution of the surplus funds shall comply with the revised court-approved audit.
Laws, Rules, and Regulations
Persons engaging in the mortgage lending process, Mortgage Assistance Relief Service Providers, and Foreclosure Consultants are expected to be knowledgeable about and in compliance with their obligations under Maryland law when engaging in mortgage related activity, and any other applicable State or Federal statutes, rules, and regulations.
Maryland laws, rules, and regulations can be found by accessing the Annotated Code of Maryland and Rules and Code of Maryland Regulations (COMAR). Certain relevant Maryland laws, rules, and/or regulations include, but are not necessarily limited to:
- Maryland Code, Real Property Article, Title 7, Subtitle 1 (Mortgages and Deeds of Trust)
- Maryland Code, Real Property Article, Title 7, Subtitle 3 (Protection of Homeowners in Foreclosure Act)