Legal Question in Real Estate Law in Maryland
Purchaser of a Foreclosure
On 01/19/05 I purchased a house at a foreclosure sale in Prince George�s County, Maryland. On 2/16/05 a legal notice was published by the Clerk of the Circuit Court ordering that the sale be ratified and confirmed unless cause to the contrary is shown on or before the March 21, 2005. The terms of sale state �In the event the sale is not ratified for any reason, the Purchaser�s sole remedy, at law or equity, is the return of the deposit without interest� and �In the event settlement is delayed for any reason, there shall be no abatement of interest�. I called the Trustee�s office last week and was told that the debtors in the case filed for bankruptcy after the foreclosure sale. Consequently, the court will not take action to ratify the sale pending action by the bankruptcy courts, which is likely to take several more months. I was told that the mortgage lender is seeking relief from the bankruptcy courts, but that motion is being handled by a different law firm so the foreclosure trustee could not tell me what was going on there. Am I entitled to a refund of my deposit now since the court can not issue the ratification order at this point or must I wait until the bankruptcy matter is resolved?
1 Answer from Attorneys
Re: Purchaser of a Foreclosure
From the information that you have provided, it seems to me that you are not yet entitled to a return of your deposit. The Court cannot determine whether the sale can be ratified or not until after the bankruptcy court lifts the automatic stay (either on motion of the lender; by dismissing the case; or by granting the discharge). Once the Bankruptcy Court lifts the automatic stay, the Circuit Court can review the sale to determine whether it should be ratified. If the Circuit Court, at that point, denies ratification of the sale, then you are entitled to receive your deposit back. Unfortunately, more often than not these days, foreclosure proceedings involve a bankruptcy stay. Once the automatic stay is lifted, it should not take long for the Circuit Court to determine whether the sale should be ratified.
As far as the attorney not being able to inform you of the status, he is likely not handling the matter and doesn't have the information at his fingertips. However, if you are interested in details of the bankruptcy, and in particular whether (and when) the lender requested relief from the automatic stay, feel free to contact me. I can access the court's electronic docket and provide you with that information. While that will not speed up the process, it is comforting to know how things are progressing.
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