Consumer's Guide to the Maryland Foreclosure Process
Let’s face it, the Maryland foreclosure process is confusing! With lender's giving homeowners the run-around, and the notices being terrifying, it’s overwhelming. If you're buying a home in foreclosure, you'll want to be educate about the process, so you don't waste your time trying to buy a property that may end up not happening.
In this post, I’ll give you a simple basic breakdown of the foreclosure process in Maryland.
A Simple Breakdown of the Maryland Foreclosure Process
Get this simple breakdown to better understand the process. If you want to learn more get a free copy of Delmarva Home Relief's Maryland Foreclosure Process Guide that explains more about the notices in Maryland.
The Notice of Default
When you first fall behind on your mortgage, you start getting calls from your lender or loan servicer about making a payment. This is a no brainer. After you’re 30 days behind on your mortgage, you’re sent a “Notice of Default”. It’s basically a letter from your lender that tells you that you’re behind on your mortgage. Your lender or loan servicer will most likely present your options, starting with a loan modification.
The Notice of Intent to Foreclose
When you are 60 days behind on your mortgage, you may receive the “Notice of Intent to Foreclose”. This is not a notice that your home is going to be sold by the bank. It is basically telling you that your lender is intending to start the foreclosure process. If you receive this notice when you’re 60 days behind on your mortgage, then this notice may expire after 45 days. After it expires the lender can start the process with the court. You still don’t have a sale date on your home.
You may get information about mediation with the Notice of Intent for Foreclose. This mediation is called “Pre-File Foreclosure Mediation”. Lenders and loan servicers are not required to participate in Pre-File Mediation. If you can apply for Pre-File mediation you will not be eligible for Post-File Mediation, which comes later in the process. We have noticed that manly CDA mortgages participate with Pre-File Mediation. This doesn’t mean you can’t get it if you don’t have a CDA Mortgage. You should check your notice to see if you can apply or not.
Active Foreclosure Status with lenders and loan servicers
After you’re 90 days behind on your mortgage, the lender considers you as “Active Foreclosure”. When you call your lender for a status update, you may be told “Your mortgage account is in Active Foreclosure, and there is no sale date set on your property at this time”. Whether you’re close to a sale or not, you could be told this from your lender. Many homeowners get scared when they are told this from their lender. It’s important to understand your options and the process in your state.
If you don’t get the “Notice of Intent to Foreclose” when you are 60 days behind, and you receive it after you’re 90 days behind, your lender could file the Notice of Foreclosure Action” after the “Notice of Intent to Foreclose” is sent to you.
The Notice of Foreclosure Action
The “Notice of Foreclosure Action” is the notice that is filed with the court. Now, you’re in the court phase of the process.
The “Notice of Foreclosure Action” can include one of two notices:
- The Preliminary Loss Mitigation Affidavit
- The Final Loss Mitigation Affidavit
The Preliminary Loss Mitigation Affidavit
The “Preliminary Loss Mitigation Affidavit is generally sent when the property is owner occupied. This means the borrower of the mortgage lives in the property. If you get this notice, you may get the “Final Loss Mitigation Affidavit” 30 days after you receive the Preliminary. If the borrower does not occupy the property, your lender may skip this notice, which means you could lose 30 days in the process.
The Final Loss Mitigation Affidavit
The “Final Loss Mitigation Affidavit” is generally sent if the property is not occupied by the borrower or after the Preliminary. This notice generally expires in 30 days. After it expires you could have a foreclosure sale within 30 to 45 days. With this notice, you’ll get an application for foreclosure mediation. Foreclosure mediation is for owner occupied properties. When foreclosure mediation is offered with the final loss mitigation affidavit, mediation is called “Post File Foreclosure Mediation”. It’s offered to every homeowner that occupies the property and if you request it within the timeline presented in the application, you lender has to participate. It can buy you time to plan your options.
The Notice of Trustee Sale
The last notice before a sale is the “Notice of Foreclosure Sale” or the “Notice of Trustee Sale”. This is a notice that tells you the time, date, and place the foreclosure sale will happen. Many homeowners get this notice about 1-2 weeks before the sale. If you get this notice and you’re not in review for an option with your lender, you may not get approved.
After a home is foreclosed in Maryland, you could have a few months before you are evicted from your home. There's another process after the sale that your lender has to follow. Your best bet is to contact the lender after the sale to get the status, so you can prepare for your move to new housing.
Questions? Contact Michael Nolen
Michael Nolen can be reached on his cell phone at (410) 390-2032 for questions about this article or buying MD real estate.
The information in this blog article is for information purposes only. Maryland homeowners should contact a Maryland attorney for their rights under MD law. Michael Nolen, the author of this article, is a licensed MD real estate agent at Coldwell Banker Residential brokerage and is expereince with foreclosures and short sales in Maryland. Michael is also the owner of Delmarva Home Relief, a Maryland Mortgage Assistance Relief Service Provider which focused on negotiating loan modifications, short sales, and deed in lieu of foreclosures in Maryland.