A legal primer on foreclosure
Confused by the ins and outs of foreclosure? Not sure how the state's new law changes things for lenders and homeowners?
The Maryland State Bar Association has a new brochure available online that covers foreclosure basics. For instance:
In Maryland, before the lender can file a foreclosure case against your property, the lender must:* Wait 90 days from the date that your loan is in default; and
* Send you a Notice of Intent to Foreclose 45 days before the foreclosure case is filed.
o The Notice of Intent to Foreclose will provide you with important information about why your loan is in default, the amount you owe to bring your loan current, the last payment received, contact information for the lender or secured party, for the mortgage servicer that collects your mortgage payments and for the department that can help you work out your default (the loss mitigation department).
Comments
And how about a survey on how many of wonk readers would need the primer?
Posted by: January 1954 | August 2, 2008 9:51 AM
What constitutes default of loan payments? How many months/payments missed before a loan is considered to be default?
Posted by: Joe MacDonald | August 3, 2008 9:11 AM
I've seen "default" defined differently by different companies. I believe state legislators wanted to ensure that a lender wouldn't file a foreclosure action until a borrower was at least three months behind, so "default" here would seem to be synonymous with "late."
Posted by: Jamie Smith Hopkins | August 3, 2008 9:39 AM
Under a standard deed of trust a loan is in default if payment is not recieved by 15th day of the month. In effect all it takes to be in default is to miss a single mortgage payment.
The 45 days Notice of Default is based on the 1st day of missed mortgage payment.
Example if you miss June 1st mortgage payment then the lender can send out a 45 day Notice of Default on July 15th.
Once people get behind on a loan it is very difficult to catch up on payments. In my experiance it can take up to 5 months to get a borrower caught up on a loan. (standard 30 year fixed.)
Adjustable loans are nearly hopeless to get turned around, if the rate adjustment exceeds the borrowers ability to pay it's a slow march to foreclosure.
Posted by: H | August 3, 2008 1:22 PM
There was a day when going into foreclosure was embarrassing: Meaning you were irresponsible.
It should not be looked at lightly or given a free pass.
Posted by: Dunn | September 23, 2008 3:20 PM