Thousands of Baltimore homeowners are experiencing financial hardship and are having a hard time paying their mortgage payments. If you are one of them and you are falling behind or are in default, it is important to call your lender and let them know that you are experiencing a financial hardship. They will let you know if you qualify for any foreclosure prevention programs. You should be honest and let them know your intentions if you wish to keep your home or you need to sell it. It is also advisable to consult with a Maryland foreclosure defense attorney, and hire the attorney to assist you with negotiations with your lender. Lenders can be difficult to deal with and take advantage of borrowers who do not have legal representation. If you cannot afford an attorney, you should still try and fight foreclosure by negotiating some sort of mutual solution with your lender.
Otherwise, your lender may file a foreclosure action against you in the Maryland courts, and your come can be sold at a foreclosure auction. Before that happens, here are some options that you may want to discuss with your lender to save your home from foreclosure:
- Refinance. If you have equity in your home, you can refinance by obtaining a new loan with a lower interest rate and pay off your existing mortgage. This way your payments will be lower and more affordable.
- Reinstatement. By paying your past-due amounts current, your lender will reinstate your loan.
- Forbearance. This is a catch-up plan that your lender will arrange for you so you can get caught up on the past-due payments. Once you are current, then you go back to paying your original payments. Sometimes the lender will reduce the principal balance as well.
- Loan Modification. The lender agrees to modify your existing mortgage by reducing your interest rate, extending the loan term and possibly reducing the principal mortgage balance.
- Short Sale. If you owe more on your mortgage than your home is worth, you will need to get your lender’s approval to sell the home for less and get them to agree to let you walk away owing nothing. Maryland foreclosure laws allow your lender to obtain a deficiency judgment against you for the difference between the sale proceeds and the amount you owe on the lender on your loan balance.
- Sell your home. If you have equity in your home, you can sell your home and pay your loan balance off with the sale proceeds.
Most lenders are willing to negotiate a resolution with you to prevent your home from going to foreclosure because they have too much foreclosure and short sale inventory right now on their books, the government has been pressuring them to resolve matters with their borrowers to prevent more foreclosures and foreclosure costs lenders time and money. Even if your lender has filed foreclosure proceedings against you, it can be stopped at any time prior to the foreclosure sale. However, once the property has been sold, you will not be able to redeem it. The best advice is to be proactive and not ignore the situation so you can work out a resolution with your lender.