Hyattsville Foreclosure Attorney
Saving Homes in Silver Spring, Washington, D.C., and All of Maryland
Are you seriously behind on making your mortgage payments? Have you received a variety of warnings from your lender, including a Notice to Foreclose? If you do not take prompt and decisive action, you may Lose your home. Foreclosure does not have to be inevitable, however, and relief options are available.
Our Hyattsville foreclosure lawyer can help you use bankruptcy to save your home. We have over 20 years of legal experience and routinely leverage Chapter 13 bankruptcy filings to stop pending foreclosure sales. When you file for bankruptcy, you receive relief from the automatic stay, a court order that halts all collection actions - including foreclosure. Our team at The Law Offices of Brian C. Williams can guide you through the filing process and help you take steps to protect your home.
How Foreclosure Works in Maryland
Lenders must follow certain procedures and laws to make sure that a Maryland homeowner knows the reason for a pending foreclosure.
Both federal and state laws have been enacted to stop lenders from taking actions that could surprise homeowners or that could be considered unreasonably extreme.
You will not necessarily be in danger of foreclosure if you miss a mortgage payment or two. Most mortgage agreements allow grace periods, but you may need to pay late fees or other penalties. Your lender is legally required to call you to discuss foreclosure avoidance options within 36 days of becoming delinquent on the mortgage. They must also provide loss mitigation options in writing within 45 days of missing a payment.
Foreclosure is often an expensive and protracted process for lenders, and they will typically avoid foreclosing when possible. If you know you cannot afford to pay your current mortgage, it may be worth exploring these loss mitigation options, which can include a potentially beneficial loan modification.
If it becomes clear that you will be unable to bring your mortgage current and you are unable to negotiate a solution with your lender, you will eventually receive a Notice of Intent to Foreclose. This written notice must be provided at least 45 days before your lender initiates foreclosure proceedings. In most cases, federal law prohibits lenders from starting foreclosure until homeowners are at least 120 days behind in making payments. If you know you cannot bring your mortgage current and you receive a Notice of Intent to Foreclose, you should immediately contact qualified legal representation.
In Maryland, lenders can foreclose through a judicial or nonjudicial method. In a judicial foreclosure, the lender files a lawsuit against you. If you do not respond to the suit, the lender will receive a judgment allowing them to proceed with the foreclosure and sell your home. You may be able to mount a strong defense if your lenders made mistakes in attempting to foreclose, including failing to deliver legally required disclosures. Nonjudicial foreclosures largely avoid involving the courts, and most lenders will use this approach where possible.
Your lender must send you a Request for Foreclosure Mediation after they have initiated foreclosure proceedings. You have the right to foreclosure mediation if you fill out this form and submit it with the associated fees within 25 days of receiving it. Foreclosure mediation facilitates one final opportunity to negotiate a foreclosure alternative, including a loan modification, short sale, or deed in lieu of foreclosure. However, while your lender must participate in requested mediation, they are not obligated to agree to a compromise if doing so is not in their best interest.
If mediation fails to produce a result, your lender will likely schedule a public auction. This Is your last opportunity to prevent the sale of your home.
Why You Should Not Ignore Foreclosure
If your financial circumstances have radically changed and you have accepted you cannot keep your home, you may be tempted to allow the foreclosure process to play out. This is a risky strategy that can lead to financially devastating outcomes.
Having a foreclosure on your record will seriously damage your credit and may limit your ability to secure future housing opportunities. There may also be direct financial ramifications that result from the foreclosure sale. When your home is sold at a public auction, your lender may be the only bidder. It is possible that they will bid what you owe. It is also possible that a third-party bids higher than what you owe. If the total proceeds of the sale exceed the mortgage balance, outstanding liens, and foreclosure costs, you will be entitled to the surplus.
More common is a scenario where the proceeds of the sale do not cover the entirety of what you owe, and you will be responsible for paying the deficiency. In other words, you may still owe money to your lender after they sell your home. It is always advisable to carefully explore all foreclosure avoidance solutions, including bankruptcy.
Stopping Foreclosure Through Bankruptcy
Filing for Chapter 7 or Chapter 13 bankruptcy will stop a pending foreclosure through the automatic stay. This court order prevents creditors from initiating or continuing collection actions against you, including a foreclosure sale. So long as you file your petition before the scheduled date of the sale, the sale of your home cannot take place.
If you wish to keep your home, Chapter 13 bankruptcy can be used to catch up on missed mortgage payments over time. You do not necessarily have to have any equity in the property, and you will not lose any equity that has accumulated.
Filing for Chapter 13 bankruptcy involves developing and submitting a repayment plan that takes into account all of your outstanding obligations. You will need to make monthly payments to a trustee over a period of three to five years. The size of this monthly payment will be tied to what you can afford to pay, not the extent of your debt. Mortgage arrears must be cured over the course of the plan.
Upon completing your Chapter 13 plan, you will typically be permitted to discharge any remaining unsecured debts, including credit card debt, medical bills, personal loans, and unpaid utility bills. This can provide additional relief and provide you with additional financial resources to put toward your mortgage going forward.
Many homeowners are reluctant to file a bankruptcy case, but Chapter 13 bankruptcy is a very effective and common tool that should be considered if you are facing foreclosure. Our Hyattsville foreclosure lawyer can help you understand what to expect and what your monthly payment might look like. We are committed to protecting the homes of our clients, and our team at The Law Offices of Brian C. Williams regularly provides same-day appointments and emergency filings to save properties from imminent foreclosure sales.