Facing Foreclosure? How to Avoid It and Keep Your Home

maryland foreclosure process

Every year thousands of Americans fall behind on their mortgages. If you have fallen behind on your mortgage payments, don’t panic!  You can still avoid foreclosure if you take the right actions quickly. In this article, you’ll learn about the foreclosure process in Maryland, Virginia, and the District of Columbia. You’ll also learn multiple proven ways you can escape foreclosure altogether!

What to Expect

General Foreclosure Timeline

(Timeline varies state by state, scroll down for DC, VA, MD)

Month 1: You’ve missed at least one mortgage payment.

Month 2: Your lender will begin calling you to find out if you can get caught up on your payments.

Month 3: You’ve missed three months of payments. At this point you have about 30 days to get caught up on your payments. If you haven’t tried to contact your lender or go to mediation, the foreclosure process will begin here.

Month 4: If you haven’t paid all your outstanding bills by this time, you will be referred to your lender’s attorneys.

Sale: The attorneys will schedule an auction or sale date. This is the date your home will be put up for sale. You’ll probably find out the date by mail or a notice on your door. How long you have until this happens depends on your state.

After Sale: After the auction or sale date you might get a redemption period. This is where you can still pay off all the attorney fees and monthly payments to get your house back. This only applies in some states though.

 

Washington, D.C., Virginia and Maryland Foreclosure Timelines

Month 1:  You missed a mortgage payment. A notice of default has been sent to you. You’ll also get collection notices, a loss of mitigation application, and a mediation request.

Month 2: A mediation form is sent to you and you come to an agreement with your lender. If no agreement is made, you’ll be sent a notice of intention to foreclose. This includes sale information.

Month 3: Your home has been advertised as “For Sale” and is finally sold. If you haven’t left the property once the sales gone through, you can be evicted from your home. There is no redemption period in D.C., but there is deficiency judgement after the sale.

Month 1: You’ve missed a mortgage payment and have started to receive calls from the bank. You’ll also receive a notice of default and a mediation request.

Month 2: Lender sends a notice of intent to foreclose and sale information.

Month 3: Your home has been advertised as “For Sale” between 3 days-4 weeks and has now sold. The difference in time depends on if there was a deed of trust that contains a power of sale. If there was a power of sale then the sale instructions in that document must be followed.

Month 4: A commissioner reviews the sale and expenses. There is no redemption period in Virginia. The deed is then transferred to the new owner.

Month 5: If you have still not left the property then the sheriff can get involved to remove you from the property. There is no redemption period after a sale is made in VA, but there is deficiency judgement after the sale.

Month 1: You’ve missed a mortgage payment and have started to receive calls from the bank. You’ll also receive a notice of default, collection notices. Missed mortgage payment, notice of default, collection notices, calls from the bank.

Month 2: Your lender sends a notice of intent to foreclose and a loss of mitigation.

Month 3: An order to docket has been filed by your lenders law firm.

Month 4: Your lender will send a final loss mitigation affidavit and mediation request form

Month 5: Send in the mediation request form with $50 or the sale can occur.

Month 6: Within 5 days of receiving a mediation request, the Circuit Court sends the request to the Office of Administrative Hearing (OAH)

Month 7: OAH schedules mediation (meeting with you and the lenders lawyers). If no agreement is made, the home is scheduled for foreclosure. The sale can be as soon as 15 days after mediation. Once the sale is made, the lender must report the sale within 30 days. The sale is ratified within 30 days after the courts receive the notice of the sale. You can still redeem your home between the time of the sale and ratification of the home. If you haven’t moved out by this time, paperwork can be filed for an eviction.  There is no redemption period after a sale is made in MD, but there is deficiency judgement after the sale.

These timelines are not meant to be legal advice, rather a starting point for foreclosure assistance .  The timelines also differ depending on what actions you choose to take to avoid foreclosure. Always consult with a foreclosure lawyer or your lender.  

Foreclosure Financial Aftermath

Credit and FICO Score

Nolo.com says that if your home is foreclosed on your credit score can drop 100 points or more. The foreclosure will be kept on your record for seven years.

Your FICO score, which is different than your credit score, can start improving as soon as 2 years later. If you haven’t left your house after the foreclosure sale, you can be evicted from your property. An eviction will further lower your credit score.

Purchasing Another Home

Once your home has been foreclosed on, you’ll have to wait to apply for another housing loan. How long you have to wait depends on the loan company.

-Conventional Loans (Fannie Mae, Freddie Mac) – Longest waiting period, stricter credit and income requirements.

-Veterans Affairs (VA) Loans- Two-year waiting period, you or your spouse must be a veteran or currently serving in the US military.

Federal Housing Administration (FHA) Loans – If a specific event caused you foreclosure, you can get a quicker loan through the FHA. Examples of this would be getting laid off, a medical emergency.

 Communication

Continue communication with every involved! This could be your partner, family members, your lender, a foreclosure avoidance counselor, or even an attorney.

Friends and Family: When it comes to telling loved ones about your situation, the sooner the better. You’ll need their support through this tough time and they may even be able to help.

Lender: You’ll want to tell your lender that you’re committed to saving your home from foreclosure. Explain why you missed your payment, and talk about your options. If you’re speaking with a housing counselor, tell them. These calls should be noted in your file.  You should always get the name of the person you spoke with, and remember to write down the time and date of the calls.

Foreclosure avoidance counselor: The department of Housing and Urban Development is run by the government and can help if you’re facing foreclosure. Speak to a foreclosure avoidance counselor for FREE.

Attorney: When you’re facing foreclosure, there’s going to be a lot of legal jargon thrown at you. It helps if you have legal representation, but it’s not needed. You’ll just have to do some more research and make sure you ask the right questions.

Research Foreclosure Process and Timeline

The foreclosure process is different for every state.  So make sure to research the process for your state specifically. Here are some questions to ask that will help you find out more about your states laws:

Does my state have judicial or non-judicial foreclosures? This is important because This is important because non-judicial foreclosures are a lot quicker. If you have a non-judicial foreclosure, you also don’t have a buffer between you and your lender.

How long do foreclosures generally take in my state? Here is a list of all the different states and about how long a foreclosure takes in each of them. This list is also great because it’ll let you know if you have a redemption period, which leads me to my next question.

Do I have a redemption period? A redemption period is the duration of time where a person can redeem their home by paying off any debt that has occurred with their lender.

Is there a deed of trust or power of sale? When you’re talking to your lender, ask them if you have a deed of trust foreclosure. This type of foreclosure may have a power of sale clause, which will describe how your property will be sold and advertised.

Do I live in a state with deficiency judgement? Deficiency judgement is when you owe more on your house then it was sold for at the foreclosure sale/auction. If you owe more than the bank sold the home for, you can be liable for the leftover amount due. Here is a list of states that have deficiency judgement.

I Know I Can’t Make the Payments, Now What?

I can’t make the payments, refinancing won’t work, and the bank doesn’t want to do a short sale.  Remain calm! You still have a few options on how to save your house from foreclosure:

1) Sell your house quickly!

If you have a good amount of equity, you can sell your home fast through an investment firm.. Express Homebuyers is the #1 Home buying company in the D.C., Maryland, and Va area. We purchase homes with cash and could even help you pay your existing balance with the bank.

Greg Allen, Express Homebuyers Acquisitions manager, stated

“A seller called us three weeks before their foreclosure date. I went down the same day they called us, looked at the house, and gave them an offer. They wanted to stay in the house passed the foreclosure date to find a suitable place to move into. So we contacted the foreclosure attorney and requested the reinstatement amount. We paid around $17,000 to make the mortgage current again. The seller had piece of mind and had an ample amount of time to find a new home for their family.”

This is a great example of how working with Express Homebuyers could help you with your situation. At the end of the day, the seller didn’t get their credit score hit by the foreclosure sale or possible eviction. They could stay longer in their house, and they were able to put their family at ease.

2) Put your house to work

There are a couple of options here. Rent out a room in your house or the entire house and stay with a family member. A quick way you can do this is by using Airbnb. Here’s the page to become an Airbnb “Host.” Another way to rent out your house is by using Zillow. You can list your house on there, but it might not be as quick as Airbnb. The best option would be to list your house on both.

List your house with a location scouting company. If you aren’t opposed to the idea of someone filming in your house, then this could be a great option. Locationshub is just one website where you can list your home as a possible filming location. This is a long shot, but what do you have to lose?

3) Start thinking about plan B

It’s never too early to prepare for the worst-case scenario; you lose your home.

The first option to consider would be temporarily staying with a friend or family member. This is why it’s so important to be open with your close friends and family in the beginning. People are more likely to let you stay with them if they know ahead of time.

Start looking for jobs that include somewhere to stay, rent free. Housesitting jobs. Here are some places to find some options:

TrustedHousesitters.com

MindMyHouse.com

Housecarers.com

Caretaker.org

Au pair or live-in nanny. If you’re single without a family this would be a great option for you.or Au pair positions, try checking out greataupair.com. A great place to apply for live-in nanny positions would be care.com

At the end of the day, make sure to keep in contact with everyone, use the resources available, do you research. I wish you all the best and please contact Express Homebuyers if you think we could help in any way.

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