First, please understand this section is a VERY general overview of the foreclosure process under Maryland law. It is made for the consumer so you know what to expect in a foreclosure situation. It is not a technical step by step guide to foreclosures in Maryland. There are seven basic steps to every foreclosure in Maryland:
When you miss mortgage payments you are considered to be “in default” on your mortgage. Being “in default” is a different legal status than just “being late.” When you are “in default” according to Maryland law, the mortgage company is legally justified in starting the foreclosure process.
Being behind by 15 or 30 days may not necessarily mean you are “in default” under Maryland foreclosure law. (It’s not good, and it will adversely affect your credit, but it may not lead to foreclosure.) Sometimes, you can be late up to 45 days (and sometimes more than that) before the lender will consider you “in default.” Your settlement documents should tell you how long you must be late before you are “in default.” State and federal laws also affect this.
When you are “in default”, the mortgage lender can move your loan into the collections stage. Once in collections, the lender can start the foreclosure process. In Maryland, they can also do other things short of foreclosure in an attempt to get paid. These other options may be good, or they may not.
If you are having trouble keeping up with your mortgage payments, or if you have received a notice from your lender asking you to contact them, don’t ignore it. That is the worst strategy. At least contact your lender and tell them when they can expect payment, and ask about your options. If they do not hear from you, they will assume the worse.
Before you agree to any new deal with your lender, you should call a Maryland bankruptcy attorney who knows this area of law. Do not go to any attorney for help with a foreclosure. Only an attorney who knows bankruptcy law, and the Maryland law on foreclosures, can give you your options for avoiding a foreclosure.
The right answers depend on your overall financial situation, including other debts, the value of the house, your job, and many other factors. We offer a free consultation if you are a Maryland resident in foreclosure, or you are worried about it, so you can know and understand all of your options.
(3) FILING THE FORECLOSURE ACTION
The first formal legal step the lender will take after you are in default is to file a formal lawsuit for foreclosure against you in a Maryland court. This is like filing a lawsuit to get the property back. It is filed like any other lawsuit, and will be served on you like any other lawsuit.
In Maryland, a foreclosure action cannot be filed in court until at least 90 days after you are “in default” on your loan. Additionally, under federal law, your lender must send you a notice of their intent to foreclose at least 45 days before they file that foreclosure action in a Maryland court.
(4) SERVICE OF PROCESS
You must be personally served with a summons from court when the foreclosure action is filed, just like a regular lawsuit. If your lender tries to serve you the papers twice in person but is unsuccessful, the lender may serve you by posting the summons on your property and mailing them by certified mail. Either way, there will be notice of any foreclosure action in Maryland with plenty of time for you to stop it.
(5) NOTICE OF SALE
Your lender must wait at least 45 days after you are served with the court papers before selling your home at auction. If you add up all the time limits, you will find that the earliest a lender could sell your house is 135 days after you are in default. That is over four months. Often, the real time is much longer than that because the lender has other Maryland foreclosures to process and the entire legal system moves very slowly.
But if you are in that process, do not delay. Consult a Maryland attorney now to find out your options. The situation will not get better, and actually gets worse the more you wait. At least get a free consultation and figure out what your options are.
(6) PUBLISHING NOTICE
Your lender must publish a notice of sale in a newspaper three times before the sale takes place. This takes time, and provides notice. However, the notice is usually in the legal section of the newspaper. You are not likely to read it casually unless you are looking for it. You should know it is a public record, and anyone who looks for it will see it. With the internet, that information is not hard to find out. Do not be surprised if your neighbors find out.
(7) FORECLOSURE SALE
If you do nothing to stop it under Maryland law, the foreclosure sale will occur (usually at the court house in the county where you live), and the bank will be in legal possession of your house. They can then file further legal actions to have you evicted. They cannot just show up on that date and kick you out. They have to go through a legal process to schedule the eviction.