What should you do if facing foreclosure?

Understand the process and know your options if facing a Maryland forclosure.

Facing foreclosure is an emotional roller coaster as bad as facing divorce, loss of a loved one and other major life changes.  It’s the new buzzword and unfortunately too many people are living the reality of its pain and humiliation.  Just remember, bad things happen to good people.  The stigma of foreclosure stings but with huge numbers facing foreclosure, it’s much more common place now than ever.

The Process

  • The process cannot officially begin until you are 90 days in default
  • The lender or servicer of your loan must notify you 45 days before they begin the process of foreclosure
    • The notice needs to disclose to you the date of last payment received
    • The amount you need to pay to bring the loan into current status
    • Contact information so you can speak directly with the servicer or lender

The Lender must file foreclosure with circuit court in the county where your home is located.

The document should include;

  • A statement of total debt involved including late charges, attorney fees, etc.
  • They must certify that you are not an active member of the military
  • A statement under oath that indicates the date of the default
  • A copy of the deed of trust or mortgage on the property
  • A copy of an assignment if the mortgage was transferred
  • The license number of the mortgage originator and or company if applicable

What happens after the lender files a motion to foreclose with the court?

  • The lender or lender’s representative/agent must serve you with all the papers
  • They must make attempt to serve you in person
  • After two failed attempts they notify the court and serve you by certified and first class mail.
  • They also are required to post the papers on the physical property.

Now comes the auction or sale process, how does that work?

  • The lender must wait 45 days from the time you are served
  • They must publish a “notice of sale” in local newspaper for 3 consecutive weeks prior to auction
  • They must sent you a notice of date of sale by certified and first class mail. This notice should inform you of the time, place, date and terms of the sale.

If you fail to get or accept the notice of sale that is not a reason to stop the process or sale!

How do I stop the auction of my home?

The lender, if requested must supply you the amount of money due in order to stop the sale.  You have the right to bring the loan current up to one day prior to the auction or sale date.  I have conducted auctions where the homeowner has shown up with the predetermined funds just seconds prior to sale. I have never seen a trustee reject the owners ability to pay up that late.

Where can I get help if facing foreclosure?

  • MDHope.org – (Home Owners Preserving Equity) – This organization, which is part of Maryland Department of Housing & Community Development, provides access to counseling services and resources for Maryland homeowners needing to refinance. Its loan program offers loans up to $15,000 to homeowners who need a short-term gap loan because of financial difficulty.
  • FHASecure- This program, which is through HUD’s Federal Housing Administration, is a refinancing option that gives homeowners with non-FHA adjustable rate mortgages (ARMs) an opportunity to refinance. This is a national program.
  • Maryland Department of Labor, Licensing, & Regulation (MDLL) – Expansive Q&A section about foreclosures and tips on avoiding foreclosure rescue scams. According to MDLL, “In Maryland, the lender is NOT REQUIRED to notify the homeowner/borrower of the pending foreclosure proceedings before the sale date is set by the court.”
  • Maryland State Bar Association – Foreclosure Proceedings in Maryland – Q&A answering questions like “What will happen if my property is to be foreclosed?” and “Is it too late to prevent the sale of my property?” (The answer is maybe not, if you take action ASAP.)
  • HUD Approved Housing Counseling Agencies in Maryland – This list of housing counseling agencies in Maryland comes from the U.S. Government’s Department of Housing and Urban Development (HUD).
  • Maryland Attorney General Office – Foreclosure Counseling Services Law – Link provides a list of housing counselors specializing in foreclosures as well as advice to homeowners facing foreclosure.

What do I do if I just can’t deal with this whole mess?

Because early, often and open communication is the saving grace to foreclosure you need to get outside help.  DO NOT PAY FOR HELP WITH YOUR FORCLOSURE. There are too many free agencies, hot-lines, government departments that can assist you. Do not fall prey to someone offering to help you out for $$$$. Chances are the $$$$ will go away but the foreclosure will stay.

Free or inexpensive legal help.

I am not a lawyer and I am not offering you any legal advice.  I do suggest you seek legal advice and financial advice from licensed professionals in the field.  If in fact you want to talk to a licensed real estate agent feel free to contact John Day.