Maryland Foreclosure Process: Notice, Mediation and Timeline in Prince George’s and Montgomery Counties

A thick envelope comes by certified mail with “Notice of Intent to Foreclose” across the top. Six weeks or more later, someone knocks on your door with court papers from Upper Marlboro or Rockville.

Maryland foreclosure runs through the circuit court, and it gives homeowners more steps, and more chances to stop it, than a Virginia trustee’s sale does. The catch is that the most useful protections, mediation especially, only work if you ask for them on time. Here is the process in order, with the deadlines Maryland law actually sets.

How does a Maryland foreclosure start?

It starts with a missed payment, but nothing happens in court right away. Federal mortgage servicing rules generally bar the servicer, the company that collects your payment, from starting foreclosure until you are more than 120 days behind.

Under Maryland law, the lender cannot file until the later of 90 days after the default or 45 days after it sends you a Notice of Intent to Foreclose. That notice has to go by certified mail and first-class mail, with a copy to the state’s Commissioner of Financial Regulation.

What the notice includes. It lists who holds and services the loan, the amount needed to cure the default, and where to find housing counseling. If you live in the house, it must also include a loss mitigation application, the form you use to ask for a modification or another alternative to foreclosure.

Fill out that application and send it back fast, with every document it asks for.

What is an order to docket?

The order to docket is the paper that opens the foreclosure case in the circuit court for the county where the house is. In Prince George’s County that is the courthouse in Upper Marlboro, and in Montgomery County it is the courthouse in Rockville.

It is not like a regular lawsuit, where you file an answer to a complaint. The lender files the order to docket with its loan documents and affidavits, and the case moves toward a sale unless you act.

You will be served in person, or the papers will be left with an adult who lives at your home. If the lender cannot reach you after two good-faith tries on different days, Maryland lets it mail the papers and post them on the house instead.

What is a loss mitigation affidavit?

It is the lender’s sworn statement about whether it has reviewed you for alternatives to foreclosure. If the review is not finished, the lender files a preliminary loss mitigation affidavit with the order to docket.

Before any sale, the lender has to file a final loss mitigation affidavit saying the review is complete and, if you were denied a modification, why. It has to file and mail that final affidavit at least 30 days before the sale, and no earlier than 28 days after you were served.

Read the reason for any denial carefully. A review is not complete under Maryland law if the lender denied you because it could not reach you or did not get your documents.

How does Maryland foreclosure mediation work?

Mediation is a meeting with the lender’s representative before a neutral mediator from the Maryland Office of Administrative Hearings. It is available if the house is your home.

The 25-day deadline. You have 25 days after you are served with the final loss mitigation affidavit, or 25 days after it is mailed to you, to file a request for mediation with the circuit court. There is a small filing fee, which can be waived if your income is low enough.

Maryland’s housing department puts it plainly: if you miss the 25-day window, you do not get another chance at mediation. Mark the date the day the papers arrive.

What happens next. The court sends your request to the Office of Administrative Hearings, which generally has to hold the session within 60 days. You bring the financial documents listed in the notice, and you can bring a housing counselor, a lawyer or both.

The lender has to send someone with authority to settle. Mediation does not force the lender to modify your loan, but it puts both sides in a room with a deadline.

Can I ask the court to stop the sale?

Yes, but the window is short. You can file a motion asking the circuit court to stay the sale and dismiss the case, based on a defense to the lender’s right to foreclose, such as a loan that is not actually in default or a lender that skipped a required step.

If mediation fails, Maryland law gives you 15 days after the mediation, or after the Office of Administrative Hearings reports that none was held, to ask the court to stay the sale on the ground that you should have been granted a loss mitigation option. You have to give specific reasons.

These motions are technical, and the deadlines do not bend. Here are the foreclosure defenses that still work in Maryland and how they are raised.

When can the sale happen?

It depends on whether you requested mediation. For an owner-occupied home with no mediation, the sale cannot happen until the later of 45 days after you were served with papers that include the final affidavit, or 30 days after the final affidavit was mailed.

If you requested mediation, the sale can be held as soon as 15 days after the mediation, or after the Office of Administrative Hearings reports that none took place.

How you find out. The sale must be advertised in a local newspaper once a week for three weeks in a row, with the first ad at least 15 days before the sale. Maryland’s court system also tells homeowners they should get notice of the sale at least 10 days before it.

You can still cure. Maryland law lets you stop the foreclosure by paying all past-due payments, penalties and fees up to one business day before the sale. Ask the lender’s attorney for the figure in writing, and see how mortgage reinstatement works.

What happens after the auction?

The sale is not final when the auctioneer finishes. The trustee files a report of sale with the court, and the clerk issues a notice that the sale will be ratified, meaning approved, unless someone objects.

Exceptions. You have 30 days after the date of the clerk’s notice to file exceptions, your written objections to the sale. Exceptions are generally limited to problems with how the sale itself was conducted, so they are not a second chance to raise defenses you could have raised before the sale.

Once the court ratifies the sale, it refers the case to an auditor to account for the money. The buyer still has to ask the court for possession, and you do not have to leave until the court awards it.

Can the lender come after me for the rest?

Yes. If the sale brings less than what you owed, the lender can file a motion for a deficiency judgment, a court judgment for the shortfall, within three years after the court finally ratifies the auditor’s report.

A Chapter 7 or Chapter 13 bankruptcy can deal with a deficiency, and filing before the sale can stop the sale itself. In Maryland, bankruptcy cases for Prince George’s and Montgomery counties are filed in the federal bankruptcy court in Greenbelt, and Chapter 13 can stop the sale and catch up the arrears over three to five years.

If you are trying to sort out which letter you have, here is the difference between a notice of default, a notice of intent to accelerate and a notice of sale.

What should I do right now?

If you received a Notice of Intent to Foreclose, an order to docket or a notice of sale for a house in Prince George’s County, Montgomery County or anywhere else in Maryland, call me at (202) 448-5136. Have the papers in front of you, along with your latest mortgage statement.

The consultation is free. I will tell you which deadline you are up against, how to use mediation, and whether a Chapter 13 filing, which I handle for Maryland homeowners at the Greenbelt courthouse, fits. If you already have a lawyer in a filed case, call that lawyer first.

Don’t wait. In Maryland, the 25-day mediation window closes whether you use it or not.