In July, 2010, Maryland passed a new law that requires your mortgage company to review your situation before they can sell your home at foreclosure.   Along with all the other papers they must file at the Courthouse, your lender must also file either a PRELIMNIARY LOSS MITIGATION AFFIDAVIT or a FINAL LOSS  MITIGATION AFFIDAVIT. These are statements signed under oath that they have reviewed your individual file and what options you may have to prevent foreclosure of your home.

If you get the Preliminary Loss Mitigation Affidavit, it will tell you what options your lender is offering you in order to prevent foreclosure of your home.  These may include reinstatement, forbearance, or loan modification. It will also include an application, instructions on how to fill out the application and a pre-addressed envelope to mail it back.

If you get the Final Loss Mitigation Affidavit, it means your mortgage company has reviewed your file and does not believe you qualify for any loss mitigation program they may offer.   It will also include a Request for Foreclosure Mediation Form, and envelopes pre-addressed to the Clerk of the Court and the attorney handling the foreclosure.

If you get the Final Loss Mitigation notice and you want to request mediation, you must fill out and file the request for mediation within 25 days.  You will have to pay $50.00 to file the request and send a copy to the foreclosing attorney. The Court will grant your request unless your mortgage company objects.  Once the request is granted, a date, time and location will be set for the mediation.  The mediation will be held within 60 days of your request. You will get a letter in the mail letting you know when and where to go.

The letter will also tell you what documents you will need to send to the mediator and your mortgage company.  These must be sent at least 15 days before the hearing and include things like, paystubs, bank statements and tax returns.  In addition, your mortgage company must send you certain documents, including what programs they have to help homeowners.

You may bring anyone you want to the mediation, but only an attorney can speak for you.  If you have friends or family that can offer useful information, you should bring them along. At the mediation, there will be a mediator and someone representing your mortgage company.  The mediator is not a decision maker and has no legal power to force you or your mortgage company to do anything.  They are there as a neutral party to help both sides try to work out an agreement.

If you can work out a solution, the mediator will write up an agreement to be signed by you and your mortgage company.  You will get a copy of this before you leave.  The most common solutions are  forbearances or loan modifications.  If you do reach an agreement, your mortgage company will follow up with more detailed paper work. Whatever you work out, you must make sure you keep up your end of the agreement.  If you don’t you may find yourself back in foreclosure.

If no agreement is reached, the mediator will file a report with the Court saying that.  The mediation is confidential, so nothing you say can be used against you later in the foreclosure process.  But your mortgage company can continue with the foreclosure process, so will need to pursue other options.