Once you fail to make your mortgage payment(s) you should receive correspondence from the lender and the lender's attorney indicating that there is a problem with the account. It is a good idea to make contact with the lender early on to try to work out a solution to the problem.
Before the Foreclosure is Filed
In Maryland a lender cannot file a foreclosure case against your property until: (1) your loan has been in default for at least 90 days or more; (2) the lender sends you a Notice of Intent to Foreclose; and (3) forty-five (45) days have elapsed since the Notice of Intent to Foreclose was sent. Note: Please read the Notice of Intent to Foreclose as it contains important information about your options and rights.
The Foreclosure Case
To begin a foreclosure case, the lender files the foreclosure with the Circuit Court with jurisdiction over the property (this is normally in the county where the property is located). There are a number of documents filed with the court. One document is a certification that the property owner is not a member of the military service. If you are a member of the military service and your property is in foreclosure, contact an attorney to discuss your rights under the Soldiers' and Sailors' Civil Relief Act.
The lender must personally serve you the papers filed in the foreclosure case. If the lender is unable, after two attempts on two separate days, to personally serve you, the lender may be allowed by the court to serve you by first class and certified mail so long as they also post the court papers on the property.
Before the Foreclosure Sale
Before the sale, the lender must take the following steps: (1) wait 45 days from the time you were served; (2) publish a notice of sale for three successive weeks in a local newspaper; (3) send you a notice of the sale date by certified and first class mail no later than 10 days prior to the sale date (note: failure to receive this or sign for it does not stop the sale); and (4) afford you the opportunity to cure the arrears in full to stop the sale so long as payment is properly tendered at least one business day prior to the sale date.
How to Stop the Foreclosure Sale
You should consult with a bankruptcy attorney as early as possible to discuss your options. You may have defenses to the foreclosure or you may be able to file a bankruptcy case to stop the foreclosure sale. The attorney may also be able to help you negotiate with the lender to resolve the issue. If you wait until after the sale it may be too late. In Maryland you do not have the right to redeem the property after the sale so it is very important that you get advice prior to the sale.
The Foreclosure Sale
If the foreclosure sale occurs, it will be a public auction and will normally be held at either the courthouse or the property. Afterwards, the sale must be ratified by the court before the buyer can legally evict you. It may be possible to raise defenses to the sale prior to the ratification. If the sale has already occurred speak to an attorney immediately.
What Should I Do?
Common foreclosure questions I get are: Should I walk away? Should I try to do a short sale (sell the house for less than I owe)? Should I request a deed in lieu of foreclosure? Should I file a bankruptcy case? Will the lender work with me? These questions are difficult to answer and depend on the situation. It is well worth your time to have a bankruptcy attorney evaluate your situation and provide you with options. Most offer free or low-cost consultations. Good luck.