The Maryland Foreclosure Law and Timeline; in simple and plain English that you can understand!

Posted by Owen McGab Enaohwo on May 2, 2010 | View Comments

Disclaimer: I am not an attorney, I do not play one on my blog so please do not assume I am practicing law or giving you any legal advice. If you need an attorney, please take the necessary steps to hire one!

On April 4, 2008 a new foreclosure law in Maryland went into effect. All foreclosure proceedings after that date have to follow this law. The law outlines a series of steps that your lender will have to carry out within a specific timeline in order to foreclose. This effectively gives you – the homeowner enough time to find a solution to your problem and avoid a foreclosure as well as the negative consequences it will have on your credit rating. Having a foreclosure filed against you will prevent you from acquiring a loan for a new house within 5 to 7 years after the foreclosure even if your financial situation improves.

Let us go through the timeline and steps lenders have to follow before a foreclosure case can be filed and then eventually execute the sale of your house.

Steps your lender must follow before they file the foreclosure case.

The law requires your lender to first wait 90 days after your loan has been in default before they can begin the initial foreclosure process. In addition, they must send you a “Notice of Intent to Foreclose” 45 days before the actual foreclosure case can be filed at the court house, which makes a total of 135 days; hence you have more than enough time to find a solution(s) to avoid the foreclosure. The notice which the lender files will inform you of their plan to foreclose your house and it also contains the following information:

• why the loan is in default
• The amount needed to bring your loan current
• The date of your last payment
• How to get in touch with your lender, or the office/ person in charge of collecting your loan payments.

This information is meant to give you a clear summary of your financial obligation to the lender.

Steps your lender must follow when they file the foreclosure case.

The law requires your lender to file the case with the county court where your home is located. Your lender has to submit these documents to the court at the time of filing the foreclosure case:

• A copy of the Notice of Intent to Foreclose;
• Certification that you are not enlisted military personnel because enlisted men and women have certain special rights when cases are filed against them.
• The original or certified copy of the assignment of the mortgage if the mortgage was assigned or bought by another lender;
• A detailed estimate of the total sum of money payable to your lender under your mortgage agreement which includes the initial amount owed, interest and monthly charges, late charges, attorneys’ fees and other applicable fees.
• An affidavit of ownership and a copy of the debt instrument;
• Declaration, under oath, indicating the date of default, the type default and the day they sent you information of their intention to foreclose your property;
• Original or certified copy of the deed of trust or mortgage;
• A uniform Notice regarding the filing of the foreclosure action; and
• The mortgage lender and originator’s license number if applicable.

Take note that the case can only be filed 90 days after you are in default of your loan, and 45 days after you have been notified by the lender via a Notice of Intent to Foreclose. The documents the lender is required to submit to the court needs to be properly documented. Any document submitted by the lender containing an error or false information can be used by you to stop the foreclosure proceedings. That is why lenders have to ensure that all information filed with the court is correct and properly documented. You must be given a copy of all of these documents.

Steps your lender must follow after they file the foreclosure case.

• They must personally give you a copy of all the documents that they filed at the court. Your lender has to deliver to you copies of all the documents that were submitted to the court when they filed the foreclosure case against you. If after two attempts on two different days, they are not able to serve you the documents, then the lender must file an affidavit to the court relating the attempts to deliver the documents to you. After that, the lender may deliver the documents to you by using both First Class and Certified Mail as well as post the court papers visibly on the property. In doing this, you will not be able to tell the court that you were not informed by your lender because you never received the documents.

• Your lender must wait an additional 45 days from the time you received the foreclosure documents before they can hold a sale of your property. The lender has to advertise “Notice of Sale” of your house in a newspaper with general circulation in your county for three weeks back-to-back. The first ad has to be published no less than 15 days before the date of the foreclosure sale, and the last publication should not be more than 7 days before the sale. Your lender has to inform you of the time, date and place and the terms of the sale through certified and first class mail. You should receive the information not later than 10 days before the date of the sale. The sale will not stop if you fail to receive the letter informing you of the foreclosure sale.

Note that you can stop the foreclosure one business day before the sale by paying a certain amount as determined by your lender which will include missed payments, late fees and costs. Upon request, your lender will provide you with the exact information on how to cure your loan and provide instructions how to deliver the payment.

In conclusion, the April 2008 law gives Maryland homeowners a lot of time to remedy their situation. The entire process can take more than 6 months; from the time your loan went into default, to the time you end up losing your home to foreclosure. This will only happen if you choose to “dig your head in the sand” and do nothing. That said; I am positive you are the proactive homeowner; otherwise you would not be reading my lengthy blog post. The mere fact that you are here proves to me that you have chosen to “grab the bull by the horns” and find a solution that will help you avoid foreclosure. Congratulations! You are on the right track, now allow me to propose a solution for you – it is call a Short Sale.

The first step you need to take is to find a local Real Estate Agent to help you with a Short Sale

Within the 90 day period that the law prevents your lender from moving forward with the foreclosure proceedings against you, I suggest you find a real estate professional that can help to analyze your situation and find out if the best option for you is to sell your property through a short sale. The reality is that short sales tend to take time and the earlier you get started, the better your chances are of selling the property before the foreclosure. Even though your situation might be difficult and emotionally challenging, be encouraged by the fact that your actions to seek help from an agent at the early phase of the foreclosure will yield a better result and increase your chances of taking back control of your financial situation and getting the peace of mind you deserve.

For more information on the short sale process, read my blog post titled “Take a dose of the Short Sale pill from your local Realtor to relieve your Mortgage payment Headaches”. Also read my blog post on the Home Affordable Foreclosure Alternatives (HAFA) guidelines to determine if you qualify for HAFA and its benefits.

I hope this blog post gave you a clear understanding of the Maryland Foreclosure Law, the timeline and the requirements your lender has to follow before being able to foreclose your property? Please, take time to share your thoughts, questions and ideas with me and other readers to this site by leaving a comment below.

Visitors who read this post also read:

• The HAFA Guidelines for Maryland Homeowners who need a Short Sale in order to Avoid Foreclosure
• Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure; which of these represents the best choice for a homeowner in distress
• Documents required by lenders in order to begin the Short Sale process