The Court of Appeals of Maryland has clarified Maryland Rule 14-305, holding that a borrower’s post-foreclosure right to object is limited primarily to assertions of procedural irregularities in the foreclosure sale itself. Bates v. Cohn, No. 28, 2010 WL 5113198 (Dec. 16, 2010).

After her home was sold at foreclosure, mortgagor Sonja D. Bates filed exceptions to the sale, asserting that the mortgagee did not comply with federal pre-foreclosure loss mitigation requirements. The Court of Appeals affirmed the lower court's ruling that: 1) after a foreclosure sale, the debtor's later filing of exceptions may challenge only procedural irregularities of the sale; 2) a homeowner/borrower ordinarily must assert known and ripe defenses to the conduct of a foreclosure sale before the sale, rather than in post-sale exceptions; and 3) the mortgagor had to raise the lender's failure to comply with loss mitigation requirements by filing a motion for pre-sale injunctive relief.

The appellant's claim of the mortgagee's failure to comply with loss mitigation requirements was not related to a procedural irregularity of the sale or statement of indebtedness, and therefore was barred because it was raised after the foreclosure sale had been completed.

This most current interpretation of Rule 14-305 suggests that unless the mortgagor claims a procedural irregularity in the foreclosure itself, such as lack of notice, or perhaps in the unusual circumstance where a mortgagor raises a question about the validity of the underlying mortgage, post-foreclosure exceptions will be barred.

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