How to Face a Foreclosure in Maryland
You should counter the possibility of foreclosure in Maryland with quick, aggressive action. The Maryland State Bar Association recommends contacting your lender immediately, to ask that the foreclosure process be stopped while you work on a solution for missed mortgage payments. The lender must be receptive to your request because of a Maryland Foreclosure Mediation Law that took effect in July 2010. The law requires your lender to meet with you and an independent party in mediation to discuss all possible alternatives to foreclosure, if you're not able to work out a solution with the lender directly. The state law requiring mediation was passed to help stem a wave of foreclosures in the state.
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Instructions
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Seek assistance from a nonprofit housing counselor in Maryland, such as the Greater Baltimore Urban League, or Consumer Credit Counseling Service of Maryland. Visit the HUD website for a complete list of government-certified counselors in Maryland (see Resources). Describe your foreclosure situation to the counselor and ask her to participate in a three-way call with you and the lender. This phone call isn't for mediation; it's merely a discussion. Hopefully you'll reach an agreement without the need for formal mediation.
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Place the call to the lender's Loss Mitigation Department -- the most direct access available for foreclosure resolution, according to the Maryland Bar Association. Loss mitigation specialists represent the lender on all issues related to delinquent mortgages, including foreclosures, short sales and loan modifications. State law requires the lender to be forthcoming about all possible alternatives to foreclosure, including the Home Affordable Modification Program offered through the federal government, and any other special programs available through the lender. Possibilities include offering you more time to get your account current, or a payment plan that allows you to pay a little extra each month until you're caught up. The foreclosure process can be stopped immediately, if the lender agrees to a plan.
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Ask the lender for what may the most effective solution for your foreclosure problem -- a complete modification of the loan to make it more affordable. The Maryland Department of Housing and Community Development reports that state law requires the lender to officially consider your request for loan modification. Request an application from the lender and submit it. However, the law also allows the lender to reject your request and continue with the foreclosure. Before continuing, the lender must send you a notice that your application has been denied, along with a form marked "Request for Mediation." State law requires the lender to send the form. The mailing of the form indicates the lender is continuing with the foreclosure action through the court system, and will soon file a legal brief in court called a "Final Loss Mitigation Affidavit" -- the initiation of formal proceedings to foreclosure on your house.
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Complete the Request for Mediation form within 15 days and file it with the circuit court. The address and filing instructions will be included with the form. A non-refundable $50 fee is required at filing. The court will contact you with a date for the mediation session. An independent mediator arranged by the state will try to help you and the lender resolve the issues. If the lender doesn't agree, the foreclosure continues.
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Keep working on solutions of your own throughout the process leading to mediation. For example, you'll have a strong case for ending the foreclosure if you can report at the mediation meeting that you've made all the payments to bring your account current.
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File for Chapter 7 or Chapter 13 bankruptcy in Maryland if mediation efforts fail. The Maryland Bar Association reports that the foreclosure proceedings will be halted by a court order once you file, giving you one last chance to save your house, with the help of the bankruptcy courts. Consult with a bankruptcy attorney if you're considering this option.
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