FORECLOSURES IN MARYLAND
The word foreclosed is derived from an old french term meaning “to exclude” or “shut out”. A foreclosure is an action of a mortgage or lien holder to take possession of a mortgaged property if the lien holder or mortgagor fails to make the agreed upon payment, pursuant to the mortgage, i.e. defaults. Maryland has a quasi-judicial method of foreclosure that a mortgagee (the bank or lender) must follow in order to properly foreclose on a property. This means that the mortgagee can institute an action to foreclose in accordance with the law, but a court must ultimately ratify the foreclosure for it to be legal and binding. To initiate a foreclosure a mortgagee will appoint a trustee who will file an order to docket or complaint to foreclose with the court. The court in turn monitors the foreclosure and gives certain approvals during the process. Foreclosure laws are general contained in Section 7-105, et seq. of the Maryland Real Property Article. The homeowner is notified throughout the process, including of the auction date and the filing of the auditor’s report, which is a tally of the auction price, costs of foreclosing, attorney’s fees, etc. Typically, the buyer at auction, aka the third party purchaser, must close on the property and take title following the sale, but before the auditor’s report is submitted by the trustee. Ratification of the auditor’s report generally signifies the finalization of the foreclosure process; although, mortgagees have the option of seeking a deficiency judgment against mortgagors, which is a personal judgment they are held liable for, equal to the overall debt plus accrued interest less the sale price at auction.
Foreclosures typically occur when a homeowner defaults on a home mortgage obligation or home equity line of credit (HELOC); but, other lien holders can also foreclose on properties, including condominiums or homeowners associations that have secured liens for unpaid assessments. However, condominium or homeowners associations generally foreclose subject to first or second mortgages that have priority, and any third party purchaser that desires to retain the property will more than likely have to negotiate or assume payment of primary mortgage(s) or liens to prevent those mortgagees from instituting their own foreclosure(s).
DO I NEED REPRESENTATION IN A FORECLOSURE?
Although the basis for a foreclosure is always default or lack of the financial ability to pay, there are many reasons that a mortgage or lien can go into default. Failing to keep up with financial obligations can result from unexpected medical bills, tragedies, or other hardships. Although a foreclosure has been instituted that does not automatically mean packing up your belongings and moving someplace else. There is a process called loss mitigation, which options include: deed-in-lieu, forbearance, repayment plan, loan modification, and short sale. Knowing these options and understanding the consequences of a foreclosure will help you to navigate through a foreclosure and to make the best decisions for you and your family.
THE LAW OFFICE OF P. HONG LE, LLC CAN HELP
If you have received a notice of intent to foreclose or you have been served with an order to docket or complaint to foreclose, and you have questions about what it all means, then the Law Office of P. Hong Le, LLC can help. Whether you would like full representation or assistance with specific aspects of your foreclosure, the Office can provide foreclosure counseling to help you navigate its murky waters. Flatly ignoring a foreclosure and walking away from the property may have grave consequences, and may cause more damage than you realize. Contact the Office today to schedule a consultation regarding your foreclosure!