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Saturday, September 24, 2022

Foreclosure Prevention Tips

Question: I just received a notice in the mail that my home was going into foreclosure. What do I do now?

Answer:

Receiving a notice that your house is going into foreclosure can be stressful. Especially if you have missed payments due to life circumstances such as financial hardships, death, or illness. However, all hope is not lost. It is very important that you do not allow the stress to overwhelm you to the point you are paralyzed from acting. Below are some tips to follow.

  1. Contact your mortgage servicer as soon as possible.

The contact information for your servicer is on your monthly statement. Tell your servicer if you are experiencing financial hardship due to the COVID-19 pandemic or for any other reason. Ask your servicer to evaluate your eligibility for programs to avoid foreclosure – this is called a “loss mitigation review”.

  1. Remain in contact with your servicer throughout the loss mitigation review process.

It is extremely important that you always remain in touch with your lender. Do not cut off communication with your lender. The earlier you are able to work with your lender in the foreclosure process, the better. If you haven’t contacted your lender, contact them immediately.

  1. Check your mail frequently
  2. Respond to voicemails and requests from your lender
  3. Make sure your lender/servicer has updated and correct contact information for you.
  4. Keep a written record of all your interactions with your servicer, including who you spoke with and when.
  5. If you are unresponsive or they are unable to reach you, your servicer may proceed with the foreclosure process.
  1. Know your rights as a mortgage borrower in Maryland. You have the right to:
  1. Receive timely answers to your questions and a prompt response from your servicer after you ask to be reviewed for options to avoid foreclosure.
  2. Receive an accurate copy of your payment history if you request this from your servicer.
  3. Be informed about all your loss mitigation options. Ask additional questions if you do not understand the financial implications of your options.
  4. Ask your servicer for their appeals process if you would like to dispute the results of a loss mitigation review.
  5. Participate in mediation session with your servicer if you are served with foreclosure papers and your home is your primary residence.
  1. Contact a housing counselor.

A housing counselor can assist you with determining what your options might be and help provide necessary documents to your lender. The state of Maryland operates a hotline which can connect you to free qualified housing counselors in your community. Call 877-462-7555. The state of Maryland also operates a financial assistance fund called the Housing Assistance Fund. You can apply online at https://marylandhaf.com/prescreening or call 833-676-0119, Mon-Fri 8 a.m. to 7 p.m.

Additionally the City of Baltimore has an assistance fund for residents called the Emergency Mortgage and Housing Assistance Program. You can apply for this program at https://dhcd.baltimorecity.gov/hho/emergency-mortgage-housing-assistance-program or call 410-396-3023.

  1. Contact a nonprofit legal services organization.

Often after speaking with a housing counselor, the housing counselor will refer you to a nonprofit legal services organization if they have identified an issue that requires the assistance of an attorney. An attorney can represent you in mediation to assist in resolving any outstanding issues regarding the foreclosure prevention options that are available. In addition to mediation representation, an attorney may also be able to assist you if the lender has not met the foreclosure requirements. If you believe that your lender has not met the foreclosure guidelines, please contact an attorney as soon as possible.

  1. Beware of Foreclosure Prevention Scams

There are a number of fraudulent “mortgage assistance relief” services and “foreclosure consultant” scams that take advantage of people during this traumatizing process. There are ways to protect yourself from these scams:

  1. Do Not Pay anyone in advance to assist with a loan modification. This is illegal in MD, unless paying an attorney retainer.
  2. Do Not Send your payments to anyone other than your servicer.
  3. Do Not Believe anyone that guarantees that they will save your home

If you believe you are a victim of a foreclosure scam, please contact the Office of Commissioner of Financial Regulation at 410-230-6077 or email [email protected]

Aja’ Mallory is a staff attorney at the Maryland Volunteer Lawyers Service. Her practice focuses on housing and consumer issues for Marylanders of limited means.

Do you have a question you would like to see addressed in this column? Email [email protected] to submit your question.

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