If you are behind on your mortgage, under Maryland law, your lender is required to send you several different kinds of notices before it can foreclose on your home, including a Notice of Intent to Foreclose. These notices should not be ignored as they give you different options when dealing with a foreclosure on your home, including loss mitigation such as mediation, loan modification, or other potential options to avoid foreclosure and they give you very important deadlines by which you have to take certain actions. Typically, these notices will be sent if you are 3 months behind on your mortgage.
A foreclosure will have a significant negative impact on your credit score, and lenders view a foreclosure as a serious derogatory mark on your credit. The sooner you take action, the better your chances are at saving your home. If you cannot get a loan modification or other loss mitigation option, Chapter 13 and Chapter 11 bankruptcy will stop a foreclosure sale from taking place due to the automatic stay, giving you breathing room and control to pay the arrears over time.
The Notice of Intent to Foreclose
Under Maryland law, your lender must send you a Notice of Intent to Foreclose in Maryland at least 45 days before starting foreclosure proceedings by filing an Order to Docket Foreclosure with the Circuit Court in the county in which your home is located. There are different kinds of Notices of Intent to Foreclose depending on the kind of property, but generally, the first part of the Notice of Intent to Foreclose looks like this:
The Notice of Intent to Foreclose in Maryland is one of the first steps in the foreclosure process and it lets you know that your lender has determined that foreclosing on your home is your lender’s best option. If you don’t respond to this notice or take action, your lender will move on to the next step in the foreclosure process.
Loss Mitigation Options
Part of the Notice of Intent to Foreclose in Maryland is a loss mitigation packet, which includes several forms that you can complete to determine if you have other options other than foreclosure. If you properly submit a Loss Mitigation Application, your lender will evaluate you for a few different options.
A Loan Modification
A loan modification is an option that would take the amount that you’re behind on your mortgage and roll that into the principal balance, your interest rate would be adjusted, and your monthly payments would change taking into account the higher principal amount and interest rate. There are strict requirements and deadlines to complete a loan modification and many homeowners do not understand the loan modification process.
A Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is when your lender has decided that if you transfer the property to your lender, it will not foreclose and you will be released from your obligations under the loan.
A Short Sale
A short sale is when your lender allows you to market your home for sale and the lender can agree to accept an offer that is less than the total balance owed on the mortgage. Any offer is subject to approval by your lender. If your lender approves a short sale, you could also walk away from your home and now owe on it.
Your lender may evaluate these options and determine that you do not qualify for any of them. Also, you may not want to walk away from your home and may not be satisfied with the loan modification you are offered because of high interest rates, which can significantly increase your monthly mortgage payment.
A Notice of Intent to Foreclose in Maryland does not mean that your home has to go to foreclosure if you take action promptly.
Chapter 13 and Chapter 11 Bankruptcy Give You Control To Keep Your Home
If you received a Notice of Intent to Foreclose in Maryland, you can choose to file Chapter 13 or Chapter 11 bankruptcy and have more control over the future of your home. When you file for bankruptcy, you are protected from foreclosure due to the automatic stay, and you can propose a plan to pay back what you owe on your mortgage over a period of time. You can keep the same interest rate that’s on your note and mortgage with your lender and can get more favorable terms that way.
If you have received a Notice of Intent to Foreclose in Maryland and are afraid of losing your home, call the Maryland Bankruptcy Attorneys at Steiner Law Group today at (410) 670-7060 or schedule a consultation.