Foreclosures have spawned a new industry, due to the recent law changes now in effect in Maryland and other states. In Maryland should a lender initiate a foreclosure proceeding, the lender must offer the defaulting borrower the right to mediate prior to going forward with the foreclosure sale. The borrower upon receiving notice of the pending foreclosure sends in $50.00 (to cover the cost of the mediator), and the court designates a date and time for mediation. Prior to the meeting, the borrower has to provide documentation to the lender’s representative including bank statements, a hardship letter, evidence the borrower still lives in the property, tax returns, a completed 4506 form and 710 form, as well as any other extenuating circumstances for the lender to consider. Once the mediation representative has received all documents, the lender reviews the information and determines whether the borrower is a candidate for loan modification or other relief. If the borrower is upside down, they are more likely to get a modification than if there is equity in the property.
The process before mediation and after the meeting can take up to 6 months. If the lender agrees to modify, the borrower is given a new payment under terms the lender believes are in line with borrower’s income. If no modification is allowed, the lender can go forward with the foreclosure. The process is trying and the best advice I can give the borrower is document everything you do and keep copies. The lenders appear to have a convenient “black hole” where all documents seem to end up. In handling one recent mediation, our client had the papers sent to the lender on numerous occasions, only to be told that he had provided no information or communication and the lender was not inclined to grant a modification based on the borrower’s failure to respond. Our best advice is to hire an attorney who handles these matters and brace yourself for a trying time. We are happy to talk with anyone in this predicament and there are other agencies who also handle mediations.
We at Colony Title want to be your Title Company and real estate law firm. For additional information, please contact Tee Tillman at 410.884.1160 ext. 3007 or visit ColonyTitle.com today!
About Colony Title Associates:
Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings per year in the central Maryland area. The founder Tee Tillman has over 23 years experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers. Colony is the preferred choice for many real estate brokers in the area.