The Governor of Maryland just signed a new law to help homeowners facing foreclosure. The new law takes effect on July 1, 2010 and provides new procedures that mortgage lenders must follow before foreclosing on the property. Before a foreclosure case is filed in the Circuit Court where the property is located, the lender must send the homeowner an application for a loss mitigation/loan modification program. The lender must wait at least 45 days after sending the application to the homeowner before filing a foreclosure case with the court.
The lender will need to let the home owner know the results of the application at least 30 days before the foreclosure sale date. The letter to the homeowner must state the reasons for the denial of the loan modification. Once the homeowner receives this letter from the lender, he or she has 15 days to ask the court for mediation. In order to request mediation, the homeowner will need to complete a mediation request form and pay the court $50.00. Once the court receives the request for mediation, the foreclosure sale is put on hold and the parties will need to attend a mediation conference. The mediation will be conducted by an administrative law judge who will schedule the mediation within 60 days of the receiving the homeowners request.
If the mediation fails, the lender will be able to sell the property at a foreclosure auction. The lenders will have an attorney representing their interests at the mediation conference. My suggestion is that homeowners also hire an attorney to represent them at the mediation conference.
Laura J. Margulies is a principal in the firm of Laura Margulies & Associates, LLC. We represent consumers in bankruptcy and litigation matters in Maryland and the District of Columbia.
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