MD - New Foreclosure Mediation Law & Foreclosure Process

Posted over 3 years ago. Applies to Maryland, 2 helpful votes

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Maryland has enacted new laws protecting homeowners in foreclosure or default. The intent of the new law is to give homeowners every opportunity to save their homes by forcing the lender to properly notify you of your foreclosure, extending the time it takes to foreclose, and requiring mediation of your foreclosure case.

Hopefully, this overview will both help you understand the timelines related to these new laws and allow you to act within the law to protect your home. The information contained below is general in nature and should not be construed as legal, tax or financial advice. If you are facing a foreclosure or default, seek immediate legal help.

The Foreclosure Process

The process leading up to foreclosure begins when you receive a “Notice of Intent to Foreclose" in the mail. Although not technically in foreclosure at this point, you should immediately call an attorney to giver yourself the best chance of a positive outcome.

As early as 45 days after you get the Notice of Intent to Foreclose, a foreclosure may be filed in Court. When a foreclosure is filed against you, you will be served with a large packet of papers called an “Order to Docket". After the Order to Docket has been filed, Maryland law requires that your mortgage company review your circumstances to see if you are eligible for a loss mitigation program that may help you avoid foreclosure. Before the house can be sold, this requirement must be met by your lender. The lender will have the option to follow one of two foreclosure tracks, or “timelines." If the loss mitigation review was completed before the actual filing of the foreclosure, the lender will file both an Order to Docket and a “Final Loss Mitigation Affidavit" at the same time. If the loss mitigation review was not completed, the lender will file a “Preliminary Loss Mitigation Affidavit."

There are different timelines associated with each Affidavit and are illustrated below.

Timeline # 1 – Final Loss Mitigation Affidavit

Below is a summary of the timeline when the lender files an Order to Docket a Foreclosure along with a Final Loss Mitigation Affidavit. (Times in this chart are for general information. The timing of specific events in your actual foreclosure action may vary).

Day 45 (after missed payment): Notice of Intent to Foreclose sent.

Day 90: Order to Docket or Complaint to Foreclose filed.

Day 105: Last day for homeowner to request foreclosure mediation.*

* If foreclosure mediation is not requested by day 105, or if a motion to stay the sale has not been filed, or if the borrower is otherwise unable to stop the foreclosure, the property may be sold on day 135 and the remainder of this timeline is inapplicable.

Day 110: If foreclosure mediation is requested, circuit court sends the request to the Maryland Office of Administrative Hearings by this day.

Day 170: If requested, foreclosure mediation must take place by this day unless postponement is requested.

Day 185: Foreclosure sale can be held unless a motion to stay the sale is filed or the borrower is otherwise able to stop the foreclosure.

Timeline # 2 - Preliminary Loss Mitigation Affidavit

Day 45 (after missed payment): Notice of Intent to Foreclose sent.

Day 90: Order to Docket or Complaint to Foreclose filed.

Day 118: Final Loss Mitigation Affidavit and form to request foreclosure mediation sent.

Day 133: Last day for homeowner to request foreclosure mediation.*

* If foreclosure mediation is not requested by day 133, or if a motion to stay the sale has not been filed, or the borrower is otherwise unable to stop foreclosure sale, the property may be sold on day 148 and the remainder of this time line is inapplicable.

Day: 138 If foreclosure mediation is requested, the circuit court sends the request to the Maryland Office of Administrative Hearings by this day.

Day 198: If requested, foreclosure mediation must take place by this day unless postponement is requested.

Day 213: Foreclosure sale can be held unless a motion to stay the sale is filed or the borrower is otherwise able to stop the foreclosure sale.

The Mediation Process

The new 2010 Maryland mediation law applies to all foreclosures of primary residences.

Regardless of the type of loss mitigation affidavit filed, you still have the right to request mediation once a foreclosure is initiated. Once you request mediation, your request is automatically referred to the State Office of Administrative Hearings (OAH) for scheduling. Your lender can object to this by showing that mediation for your case is inappropriate. If that happens, the Court will decide whether the mediation should go forward. If the Court decides you are not entitled to mediation, you should consult an attorney.

A local housing counselor may be able to help you prepare for mediation. A list of local housing counseling organizations can be found at www.mdhope.org. Mediation hearings are scheduled within 60 days. You may bring an attorney to argue your position.

The mediation is heard by an administrative law judge (ALJ) who is employed by OAH. The ALJ is a professional mediator and will not make a binding decision related to your case. The ALJ is neutral and does not take sides. The primary goal of the ALJ is to assist the parties in finding common ground and help all parties resolve their differences.

If the parties reach an agreement, the mediator will draft the agreement and will forward it to the Court. All communication and discussion at the mediation is confidential, which means that it cannot be used as evidence in any subsequent Court proceedings by you or the lender.

We hope this review of Maryland’s new foreclosure and mediation process has been helpful to you. If you are facing foreclosure or need any legal or financial help, contact me.

Additional Resources

Maryland HOPE

MD Judiciary Case Search

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