Frederick County is still high — 45 in September, according to RealtyTrac — and one major problem, according to housing professionals, is that people wait too long to seek help.
Patrick McLister, an attorney with Salisbury and McLister who works with real estate professionals, said lenders, brokers and government agencies will work with homeowners on short sales and loan modifications.
In a short sale, the lender approves the sale of the property for less than what the borrower owes. The borrower avoids the damage a foreclosure would bring to his or her credit rating, and the lender does not have to worry about selling the property.
In one 12-month period, Brad Petersen of the Frederick Community Action Agency and fellow housing counselor Joe Baldi talked with nearly 1,000 homeowners facing foreclosure, Petersen said at a July event. They were able to help nearly 400 to keep their homes.
Homeowners who miss mortgage payments or think they are in trouble should talk with their lender and, if needed, come into the FCAA office or call, Petersen and Baldi said.
According to a new Maryland foreclosure process law passed in 2008, a lender must send a borrower a notice of intent to foreclose at least 45 days before filing a foreclosure action in court. A foreclosure action cannot be filed in court until at least 90 days after a loan default.
The borrower must be personally served with court papers when the foreclosure action is filed. If unsuccessful in serving papers personally, the lender can post them on the property and send them by certified mail. The lender must wait 45 days after the owner is served with court papers before the house can be sold at auction. Borrowers have the right, up until one business day before the auction, to pay any overdue payments, late fees and charges to stop the foreclosure.
In 2010, Maryland established the Foreclosure Mediation Law. It was designed to bring together lenders, borrowers and an independent party, such as a housing counselor, to ensure all avenues toward resolving the problem have been explored.
It is the homeowner’s responsibility to talk to the lender, whether it is about loan modification or mediation. To go to mediation, a homeowner must obtain a form and pay a nonrefundable $50 fee and file the form with the Circuit Court.
Those facing the loss of a house are often vulnerable to scams. These can occur during the mortgage process, by misrepresentation or omission of information, according to the Maryland Department of Labor, Licensing and Regulation.
State agencies warn those facing financial difficulties to be beware of advertisements, emails or even someone coming to the door offering a way out of foreclosure. Often these scammers will ask the person to sign over their deed and tell them they can remain in the house as a renter and buy it back later. In reality, according to DLLR, the scammer will stop making payments to the lender and take the house, and the borrower will be evicted.