An Overview Of Foreclosure Defense And Chapter 13 Bankruptcy
Interviewer: How do people fall into foreclosure and how long does it take and what happens to someone while they’re in it?
James Logan: The first step in foreclosure is first a few missed payments and then the mortgage companies have to send a letter to the Department of Labor and Licensing and Regulation. The letter is called a Notice of Intent to Foreclose. When they do that, they’ll also have to send a copy over to you. You’ll get a notice from the State of Maryland saying, “You’re behind in your mortgage and if you don’t do something, then they’re going to file a foreclosure”. They’ll have to wait about 45 days before they can file the actual foreclosure in the courthouse and at that point, it’ll become a public record.
A Brief Description of the Process of Foreclosure in the State of Maryland
Interviewer: What happens at the end to your house? Will the sheriff come and boot you out the day it goes to sale or what will happen? What are the events?
James Logan: In Maryland, on the day of the auction, they’ll have the auction and in most cases, it goes back to the bank because there’s no equity in the house. At that date, you’ll lose all interest in the house except you retain what’s called the right of possession in Maryland. That means you have the right to stay and occupy the house. In order for the mortgage company or whoever buys the house to get possession, they’ll have to file a writ of possession with the court and have the court issue a writ of possession. Then they’ll have to take that to the sheriff of whatever county you live in. Then the sheriff come will out and notify you of a date when he’s going to do the eviction. On that day, they will come and actually do the eviction. Fortunately, in Maryland, you have about 60 to 90 days after a foreclosure before you would have to move out of the house.
An Individual Must Be At Least 90 Days in Default Before a Bank Can File the Notice of Intent to Foreclose
Interviewer: How many payments do people have to miss to get that first notice of intent to foreclose?
James Logan: You have to be at least 90 days in default before they can file the notice of intent to foreclose. Once they send a notice of intent to foreclose, they can actually file the foreclosure in the courthouse until 45 days after that date.
The Timeframe of Completion From the Notification to the Auction in a Foreclosure
Interviewer: How long is the process going to take, the day it’s filed till the actual auction date?
James Logan: At that point, the mortgage company has to file what’s called either a preliminary or a Final Loss Mitigation Affidavit. In Maryland, you also have a right to file for mediation. Sometimes they’ll file a Final Loss Mitigation at the same time they file the foreclosure and sometimes they’ll file it later on. Either one of those affidavits, basically it’s the efforts that Mortgage Company has made to work out the foreclosure with you before filing. And once they’ve filed the Final Loss Mitigation, they’re basically telling the court that, “Hey, we’ve done what we can to try to work this out and we’re unable to”. In Maryland, you can apply for mediation and the mortgage company will have to send their representative down to a meeting with you and a mediator.
It is a Minimum of 68 Days from the Time they File a Foreclosure Auction to the Actual Auction of the House
They basically talk about various options you may have to either hold on your house or walk away from that house depending on the situation. But it’s a minimum of 68 days from the time they file the foreclosure auction when they can actually have an auction on the property. Unless the case is filed and they’ve filed a Final Loss Mitigation Affidavit and if they advertise the property three times in a newspaper, generally a local newspaper. After it’s advertised 3 times, once a week for three weeks, then they can actually set you up for a foreclosure auction. If you want to hold on to the house, that’s the date that you have to act by.