Foreclosure Assistance
We love that you live in Baltimore City, and we want to keep you here! If you are having difficulty making your monthly mortgage payment, taking action now can prevent foreclosure on your home. Local, state, and federal housing counselors and programs can help you get back on track as a homeowner. Read below for some tips and advice on what to do if you think you might be facing foreclosure. We’ve also provided a list of some expert resources in Baltimore to help you.
Tips for Preventing Foreclosure
Step One: Are you in danger of foreclosure?
• If you know your bills are mounting up or if something unexpected has happened in your life and you know that your mortgage payment will be late or you won’t be able to pay it this month, start the process of getting help.
• If you have already missed one or more payments and are getting letters and phone calls from your lender, start the process of getting help. It is not too late!
Step Two: Who should I ask for professional assistance?
The very first action you need to do is call and talk with your lender. Ask for the loss-mitigation department. The longer you wait to talk with your lender, the more fees may be piling up. If you talk with them before they start working with an attorney, they may be able to help you. Some lenders may freeze your interest rate, temporarily forgive missed payments, or create special repayment plans. These may not be long-term solutions, but they could help you while you are working out your finances.
Take advantage of free foreclosure counseling. There is a network of certified housing counselors who have been specially trained to provide advice and guidance on foreclosure issues. These counseling services are provided by nonprofit agencies and are FREE. There is a national hotline, 1-888-995-HOPE, which can link you with a local housing counselor, or you can call one of these nonprofit agencies directly. Housing counselors can also work with your lender on your behalf. See below in the ‘resources’ section for contact information.
Step Three: What are my options?
• Modify your payments: Maryland’s new Foreclosure Mediation Law became effective July 1, 2010. The law requires mortgage lenders and servicers to be much more responsive to homeowners facing foreclosure. The goal of the law is to help homeowners get relief through a loan modification if they qualify or to find an alternative to foreclosure. The law gives homeowners a new opportunity to meet with the lender and an independent party to ensure that alternatives to foreclosure have been considered and evaluated.
You should not wait until you can request mediation before starting efforts to save your home. The opportunity to participate in mediation occurs at a late stage in the foreclosure process and does not guarantee you may avoid foreclosure. Contact your lender and a housing counselor at the earliest sign of financial difficulty. A list of housing counseling agencies near you can be obtained by calling the MDHOPE hotline at 877-462-7555 or on the Hope Initiative website.
• Apply for a loan: If you have a subprime loan, you may qualify for the state of Maryland’s “Bridge to HOPE” loan program. This is a no-interest loan up to $15,000 due at sale or refinancing to those who are in danger of foreclosure. There are income limits and home value limits. In Baltimore City, a 1 to 2 person household must have $94,920 or less in income, and a 3 or more person household must have $110,740 or less in income. Your house must be appraised at less than $525,091. You must be referred to this program by a state-approved housing counselor (see below for list). For more information on qualifications, visit www.mdhope.org or call 877.462.7555.
• Refinance:
FHASecure is designed for families who are good borrowers but were steered into high-cost loans with teaser rates. This new program allows eligible homeowners to refinance into a secure, fixed-rate FHA loan even if they are in default. For more information visit www.fha.gov/fhasecure or call 1-800-CALL-FHA (1.800.225.5342).
• Sell your house: If your house is worth more than you owe, your best option may be to sell your house. Your lender can approve your plan to sell your house (usually within a specific amount of time). If you owe more than your house is worth, your lender may still approve your plan to sell your house in what is called a ‘short sale’. The lender then forgives the difference between the sale price and the amount that you owe. You can also consider ‘deed in lieu of foreclosure’ in which you ‘give back’ your property and the debt is forgiven.
Resources
Legal Help
There are many companies that will offer to help you keep your home for a fee. This is not your only option, nor do these companies have more power with your lender than you do. Be wary of companies that contact you before you contact them! Before signing any documents or refinancing your home contact a lawyer. See below for a list of Baltimore nonprofit agencies who can provide you with legal advice.
St. Ambrose Housing Aid Center (www.stambros.org) or 410.366.8550
Legal Aid Bureau (www.mdlab.org) or 410.951.7777
Civil Justice (www.civiljusticenetwork.org) or 410.706.0174
Housing Counselors
For a complete list of Baltimore City-approved homeownership counseling agencies (for help purchasing a home) click here.
Click here for a complete list of counselors that are federal and/or state-approved to help with default and delinquency (foreclosure) counseling.
Additional Foreclosure Prevention Links
