In Foreclosure In Maryland? Your best options for saving your home
I’m in Foreclosure In Maryland. What Happens Now?
When you fall behind on your mortgage in Maryland, there is a process that your mortgage company must follow. This article will explain the process and let you know what options are available to you.
You may be reading this because you have received a notice from your mortgage company that you are in foreclosure. This can be a very scary time, but the good news is that you still have time to act and save your home. Maryland has passed several laws in the last few years to slow down the foreclosure process. This gives you time to review all your options and decide what is best for you and your family.
The Maryland Foreclosure Process.
Foreclosure in Maryland is a process that takes many months from the time you miss your first payments to the time you are forced to move out of your home. At each stage of the process, you have options to try and save your home. The most important thing to remember is that the longer that you wait, the fewer options you will have. This is because you are falling further behind on your payments and the foreclosure auction is getting closer. By reading this, you have taken the first step to making things better.
The Notice of Intent to Foreclose.
The foreclosure process begins when you miss your first mortgage payment. Most mortgages are due on the 1st of each month and are considered late after the 15th. Most times, however, you won’t be marked late on your credit report until you are 30 days behind. Once you are 90 days behind, most mortgage companies will start to foreclose on your home. In Maryland, your mortgage company must send you a letter called a “Notice of Intent to Foreclose”.
The Notice of Intent to Foreclose must include important information such as why your loan is in default, the amount you owe to bring your loan current, the last payment received, contact information for the lender or secured party, for the mortgage servicer that collects your mortgage payments and for the department that can help you work out your default (the loss mitigation department).
The notice also includes information about housing counseling services that are available to you. You can go to www.mdhope.org for a list of non-profit agencies that may be able to help you for free. You should also get a Loss mitigation Application along with the Notice of Intent. This is a set of forms you can fill out and send back to your mortgage company to see if they will help you.
The notice also includes a warning about people offering to help you:
“Beware of anyone offering to “save” your home or requesting an upfront fee before providing assistance. If you believe you have been a victim of a scam, please contact Maryland’s office of the Commissioner of Financial Regulation by calling 410-230-6077 or visiting www.dllr.state.md.us/finance.”
Unfortunately, when you are behind on your mortgage, you become a target for all kinds of scams. You should be very careful of anyone who “guarantees” they can get you a loan modification and asks for money up front. Because so many homeowners were being taken advantage of, Maryland law now prohibits upfront payments in most cases.
The Order to Docket
45 days after sending the Notice of Intent, your lender can file the foreclosure. This is done by going to the Circuit Court for the county you live in and filing a long list of paperwork. Here is a partial list:
- A statement of how much you owe on the house.
- A certification that you are not on active duty in the military.
- A statement of the last payment made and when the Notice of Intent to Foreclose was mailed.
- A copy of the Notice of Intent to Foreclose;
- Original or certified copy of the mortgage or deed of trust;
- Copy of the debt instrument and an affidavit of ownership;
- Original or certified copy of the assignment of the mortgage if applicable;
- The mortgage lender and originator’s license number if applicable; and
- A uniform Notice regarding the filing of the foreclosure action.
Your mortgage company must deliver a copy of all these papers to you before they can move forward. So when you get a big package from the court, you will know that the foreclosure has been formally filed.
Once The Foreclosure is Filed.
When the foreclosure is filed, your mortgage company will also include either a Preliminary Loss Mitigation Affidavit or a Final Loss mitigation Affidavit. If you get the Preliminary Loss Mitigation Affidavit, it means your mortgage company has not reviewed your circumstances to see if you are eligible for any programs to avoid foreclosure. Along with the other paperwork, they will include a Loss Mitigation Application and a description of eligibility requirements, instructions for completing the form, and an envelope with the a preprinted return address.
You should complete and return the Loss Mitigation Application a soon as you get it. It costs nothing to send it in and it may result in your lender offering you some kind of workout program or modification. And sending it back does not stop you from pursuing any other options available.
If the lender has already reviewed your case, they may instead file the Final Loss Mitigation Affidavit. If so, they will include a Request for Mediation Form and preprinted return envelopes to the Circuit Court and the attorney handling the foreclosure. In order to be eligible for mediation, you must live in the property (commercial and rental properties are not eligible) and file the request within 25 days of being served.
Your lender may object to your request if you do not file it within 25 days, or if they think mediation is not appropriate in your case. If they do, the Court will schedule a hearing to determine if the mediation will be held.
Mediation can be a very powerful tool when dealing with your mortgage company. If you request it, a date for a hearing will be set and your mortgage company will have to send someone to meet with you face to face. This is an excellent opportunity to get you mortgage company to work with you.
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 20 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.
The Foreclosure Auction
If you don’t request mediation, or if a mediation is held but no agreement can be reached, you mortgage company can move forward to the next stage, the foreclosure auction. This is done by setting up a date for the auction and sending out the required notices.
Before they can hold the auction, your mortgage company must advertise the foreclosure auction three times in a local newspaper. The first ad must be at least 15 days before the auction and the last ad must be at least 7 days before. The ad must also be mailed to you by regular and certified mail at least 10 days before the auction.
The auction date is really the last chance to save your home. If the auction is held, you are no longer the owner of the home and eventually you will have to move out. So if you want to save your home, you need to act BEFORE the auction. Sometimes, however, people are just looking for time to save some money before moving, so the good news is that you do NOT have to move out of the house on the day of the auction.
How long after the auction before I have to move out?
Once the auction is held, your mortgage company must file a report of sale with the Circuit Court. You then have 30 days to object to the sale. You must have a legal basis to object so if you feel there was something wrong with the way the sale was handled, you should probably contact a lawyer. If no objections are filed, the Court will approve (“ratify”) the sale.
The new owner of the property, usually the bank, will then file for a Writ of Possession and you will have 30 days to respond to that. After that, the Court will issue an Order for possession and the new owner will take it to the local sheriff. The sheriff will set a date for the eviction and at that point, you will have to move.
It is important to note that no one can force you to move out of your house without going through the legal process. So some times the bank or new owner will offer “cash for keys” in order to get you to move out voluntarily. Basically, they will offer you an amount of money and you agree to leave. But again, no one can force you to leave except the sheriff. So, from the date of the auction to the date you must move is roughly 90 days or more.