IN MARYLAND PART - 1. Michael P. Coyle, Esquire Maryland Bankruptcy Attorney

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1 FORECLOSURE IN MARYLAND PART - 1 Michael P. Coyle, Esquire Maryland Bankruptcy Attorney

2 The idea of home ownership lies at the heart of what many people consider to be the American Dream. So, when financial hardship occurs and you have to consider the very real possibility that you might lose your home to foreclosure, understanding how you can protect yourself is absolutely essential. To do this, you have to have a basic understanding of what foreclosure is, how it works, and what you might be able to do to stop or delay the foreclosure process. Today we start the first of a two-part discussion on foreclosure in Maryland by looking at some common questions people have about the process. While it is always a good idea have a basic understanding of the process itself, you need to speak to your attorney about any specific questions you might have, or if you need legal advice. 2

3 WHAT IS A FORECLOSURE? A foreclosure is any action in which a secured creditor takes or repossesses the collateral used to secure a loan from the borrower. Foreclosures most often occur when residential homeowners use the home they purchase as the collateral on their mortgage. When the homeowner fails to live up to the terms of the mortgage, the creditor will seek to recover the home through a foreclosure. In most foreclosure situations in Maryland the lender seeks to foreclose on the home because the borrower has failed to make mortgage payments on time. When this happens, the lender will foreclose on the home and sell it an attempt to recover the unpaid remainder of the home loan it provided the borrower. WHAT IS A JUDICIAL OR NON-JUDICIAL FORECLOSURE? When it comes to foreclosures in United States there are two basic types: judicial and non-judicial. As their names imply, a judicial foreclosure is one in which the lender has to file a foreclosure action in a court, while in non-judicial action does not require court involvement. 3

4 Most Maryland foreclosures are a kind of hybrid between the non-judicial and judicial types. Lenders will have to file some court documents in order to begin the foreclosure proceeding, but Maryland foreclosures do not require as much court involvement as judicial foreclosures in many other states. HOW DOES A FORECLOSURE BEGIN? Though we will discuss in more detail the foreclosure process in our next paper on this topic, understanding how a foreclosure begins can be very helpful. Essentially, once a of Intent to Foreclose to the borrower. lender believes that a borrower has failed to meet the obligations on the mortgage, the lender will initiate a foreclosure action by sending what is known as a Notice This document is not a court document in that it isn't filed with the court in an attempt to begin the judicial foreclosure process. Instead, it provides the borrower with notice that the lender will file a foreclosure in a Maryland court 90 days after the borrower has received the notice. 4

5 In other words, foreclosures begin when the lender warns the homeowner of its intent to foreclose on the home. After the lender notifies the borrower, the lender then must wait at least 90 days before it files the actual foreclosure documents. What this means for borrowers is that you have 90 days from receiving the notice to try to figure out what your best options are. If you can resolve the situation before the lender files the foreclosure documents with the court, you can effectively avoid the foreclosure. If not, you might have other options, but we will discuss those in more depth in our next discussion. 5

6 TALK TO US AS SOON AS POSSIBLE Trying to deal with a potential foreclosure is not something most people are capable of doing without advice and guidance from experienced foreclosure attorney in Maryland. The foreclosure process can be not only complicated, but also intimidating. When you are faced with a foreclosure you are likely facing an organization that has a lot of experience foreclosing on people's homes. Trying to defend yourself and learning about the foreclosure process at the same time leaves you at a distinct disadvantage. Anyone facing a foreclosure in Maryland who hasn't already done so needs to speak to a lawyer as soon as possible. Even if you are not facing foreclosure, but have fallen on tough financial times and are worried about the possibility, talking to an attorney as soon as possible will always be in your best interest. 6

7 About the Author Michael P. Coyle, Esquire Mr. Coyle is one of the founding partners of Chaifetz and Coyle. Prior to Chaifetz and Coyle, Mr. Coyle was a law clerk to The Honorable Robert J. Yock. Mr. Coyle then was an attorney with several of the largest and most prominent law firms in the country, before starting his own practice. Mr. Coyle graduated summa cum laude from The Washington College of Law (American University) in 1994, and was a member of The Law Review. Prior to Law School, Mr. Coyle graduated with a BA in Government from Franklin & Marshall College, Lancaster, PA. Mr. Coyle s practice specializes in bankruptcy, foreclosure defense, general litigation, civil rights, and employment discrimination. Mr. Coyle manages the Bankruptcy Department of Chaifetz & Coyle Alexander Bell Drive, Suite 200 Columbia MD Phone: (410) Fax: