How to Avoid Foreclosure in Maryland: 8 Options for Homeowners
By: Brad Dwin
If you're behind on your mortgage payments in Maryland—or you think you may fall behind soon—the most important thing you can do is act early. Foreclosure usually does not happen after one missed payment, and receiving a notice does not necessarily mean you have run out of options. Depending on your financial situation, mortgage, equity and how far the foreclosure process has progressed, you may be able to work with your mortgage servicer, request loss mitigation, pursue foreclosure mediation, sell the property, or consider another alternative.
The short answer: What should you do if you're facing foreclosure in Maryland?
If you are worried about foreclosure:
- Contact your mortgage servicer immediately.
- Ask specifically about available loss mitigation options.
- Open and respond to every letter from your lender, servicer and the court.
- Speak with a HUD-approved housing counselor or Maryland foreclosure assistance organization.
- Determine how much equity you have in the property.
- If keeping the house is not realistic, investigate selling it before the foreclosure progresses further.
- If you have already received court papers or a foreclosure sale date, consider speaking with a Maryland attorney immediately.
The Maryland Office of Financial Regulation recommends contacting your mortgage servicer as soon as you know you may have trouble making your mortgage payment. Waiting generally reduces the number of options available.
How Foreclosure Works in Maryland
Maryland homeowners should understand that foreclosure is a process, not a single event.
A mortgage servicer may send a Notice of Intent to Foreclose, commonly called an NOI, after a missed payment or another default under the mortgage. Under Maryland law, the NOI generally must be sent at least 45 days before a foreclosure action is filed.
The next major step is typically an Order to Docket, which begins the court foreclosure process. According to the Maryland Office of Financial Regulation, an Order to Docket may generally be filed as soon as 90 days after the first missed payment, although most mortgage loans are also subject to federal rules that generally extend that period to at least 120 days.
The important takeaway is simple: Do not treat a foreclosure notice as something you can deal with later. There may still be time to solve the problem, but the available time becomes increasingly important as the process moves forward.
Option 1: Contact Your Mortgage Servicer and Ask About Loss Mitigation
Your mortgage servicer is the company that collects your mortgage payments. It may or may not be the same company that originally gave you the loan.
If you are behind, ask the servicer specifically:
"What loss mitigation options are available for my loan?"
You may be asked to complete a loss mitigation or mortgage assistance application and provide information about your income, expenses, assets and financial hardship.
Depending on the loan and your circumstances, possible options can include:
- A repayment plan
- Forbearance
- A loan modification
- Refinancing
- A short sale
- A deed in lieu of foreclosure
Not every homeowner qualifies for every option. Your servicer has to evaluate your individual circumstances.
Don't ignore your servicer
One of the most damaging things a homeowner can do is stop opening mail or responding to the mortgage company because the situation feels overwhelming. Maryland's Office of Financial Regulation specifically recommends staying in contact with the servicer, responding promptly to communications and making sure the servicer has your current mailing address and telephone number.
Option 2: Ask Whether a Loan Modification Makes Sense
A loan modification changes one or more terms of your existing mortgage. Depending on the program and servicer, a modification could potentially change the monthly payment or other terms so that the mortgage becomes more affordable. A modification is different from refinancing. With refinancing, you generally obtain a new loan. With a modification, the existing mortgage is changed.
If your financial hardship is temporary or your income has changed but you can still reasonably afford the property under different loan terms, asking about a modification may be worthwhile.
Do not assume you qualify, however. Submit the documentation your servicer requests and obtain the decision in writing.
Option 3: Ask About Forbearance or a Repayment Plan
If your financial problem is temporary, your servicer may offer forbearance or a repayment plan.
Forbearance can temporarily reduce or suspend payments under certain circumstances. A repayment plan may allow past-due amounts to be repaid over time along with normal mortgage payments. Neither option means the missed payments simply disappear.
Before agreeing to anything, make sure you understand:
- How much you will owe
- When payments restart
- How missed amounts will be repaid
- Whether your normal payment changes
- What happens if you cannot complete the plan
IMPORTANT: Get the agreement in writing.
Option 4: Use Maryland Foreclosure Mediation if You Are Eligible
Maryland also provides eligible owner-occupants with an opportunity to request foreclosure mediation. Mediation brings the homeowner, mortgage servicer or its representative, and a neutral administrative law judge together to discuss alternatives to foreclosure.
If you receive a Final Loss Mitigation Affidavit, eligible homeowners generally have 25 days to request foreclosure mediation. The request is filed with the Circuit Court, and a filing fee generally applies, although a fee waiver or reduction may sometimes be available.
That deadline matters. If you receive foreclosure paperwork, do not leave it sitting on the kitchen counter for a few weeks before deciding what to do. Read it immediately and consider getting professional help.
Option 5: Find Out Whether You Have Equity in the House
This is an important step that homeowners sometimes overlook. Being behind on mortgage payments does not automatically mean you have no equity.
Your approximate equity is:
Estimated Property Value
Mortgage Balance – Other Liens or Payoffs – Selling and Closing Expenses = Approximate Net Equity
For example, a homeowner might be struggling to make a $2,500 monthly mortgage payment but still have substantial equity built up in the property. In that situation, selling the home could potentially allow the mortgage and other valid liens to be paid at settlement while preserving some of the homeowner's remaining equity.
Before making a decision, ask your mortgage servicer for an updated payoff or reinstatement amount and obtain a realistic estimate of what the property could sell for.
Option 6: Sell Your Maryland House Before Foreclosure
If keeping the house is no longer financially realistic, selling may be a better alternative than allowing the foreclosure process to continue. There are generally two very different ways to approach the sale.
Traditional real estate sale
If the property is in good condition and you have enough time before the foreclosure sale, listing with an experienced Maryland real estate agent may produce the highest potential retail selling price.
However, you need enough time for:
- Preparing the property
- Photography and marketing
- Showings
- Negotiations
- Inspections
- Appraisal
- Buyer financing
- Settlement
If your foreclosure timeline is getting short, those timing variables become increasingly important.
Direct as-is sale
A direct sale to a Maryland home buyer can be another option when speed and certainty matter more than obtaining the highest possible retail price. This can make sense when a property:
- Needs substantial repairs
- Is outdated
- Has been vacant
- Has accumulated belongings or clean-out needs
- Cannot easily pass a traditional inspection
- Needs to close on a specific timeline
The tradeoff is important to understand.
A cash investor generally will not pay the same price as a fully financed retail buyer purchasing a renovated or move-in-ready home. A legitimate cash offer should account for the property's current condition, anticipated repairs, resale or holding costs and risk. That is why homeowners should compare their expected net proceeds, timing and certainty—not just the headline offer price.
Can You Sell a Maryland House After Foreclosure Has Started?
In many situations, yes—but time matters. Starting foreclosure proceedings does not automatically transfer ownership of the property to the lender. However, the further the foreclosure progresses, the more difficult coordinating a sale can become. There may be court deadlines, title issues, mortgage payoffs and a scheduled auction to consider.
Maryland's foreclosure process can move relatively quickly once the required stages have been completed. Homeowners receive notice before a scheduled foreclosure sale, but waiting until the last few days creates significant risk.
If you already have a foreclosure sale date, contact your mortgage servicer, a housing counselor and—when appropriate—a Maryland attorney immediately. A buyer should never promise that they can "stop your foreclosure." That decision does not belong to a home buyer.
What If You Owe More Than the House Is Worth?
If your mortgage and other liens are greater than the expected sale proceeds, a normal sale may not produce enough money to clear title. One possible alternative is a short sale. In a short sale, the mortgage lender agrees to accept less than the full balance owed so the property can be sold. Approval is not automatic, and the lender generally must approve the transaction. A deed in lieu of foreclosure may also be available in some situations. Your mortgage servicer or a qualified housing counselor can help explain whether either option may apply.
Option 7: Free Foreclosure Help Is Available in Maryland
Before paying a company to "save" your house, know that legitimate free resources are available. The Maryland Office of Financial Regulation currently directs homeowners to the Maryland Homeowner Assistance hotline at 1-877-462-7555 for referrals to approved housing counseling and legal services. Foreclosure-prevention counseling is available free to Maryland homeowners. HUD-approved housing counselors can also help homeowners understand mortgage assistance programs, communicate with their servicer and evaluate possible alternatives. The CFPB recommends using HUD-approved counseling when homeowners are having difficulty making mortgage payments.
Recommended Foreclosure Resources in Maryland:
- Maryland Office of Financial Regulation — Foreclosure Help for Homeowners
- Maryland Courts — Foreclosure and Housing Help
- HUD — Housing Counseling
- Consumer Financial Protection Bureau — Mortgage and Foreclosure Assistance
Be Careful of Foreclosure Rescue Scams
Financial pressure can make homeowners especially vulnerable to people promising an easy solution. Be cautious if someone:
- Guarantees they can stop your foreclosure
- Demands a large upfront fee for foreclosure assistance
- Tells you to stop communicating with your mortgage servicer
- Tells you to send mortgage payments somewhere else
- Pressures you to transfer title to your property
- Asks you to sign documents you do not understand
- Claims to have a special government relationship
- Creates artificial urgency to get you to sign immediately
Maryland regulators specifically warn homeowners not to believe guarantees that someone can stop a foreclosure and caution against paying advance fees for many foreclosure-prevention services.
Option 8: When Selling to We Buy MD Homes May Make Sense
At We Buy MD Homes, we are not a mortgage servicer, foreclosure attorney or foreclosure rescue company. We are a local Maryland real estate investment company that buys properties directly from homeowners. If keeping your home through loss mitigation, modification or another solution makes sense for you, you should explore those options first. But if you have decided that selling is the better option, we can evaluate the property and provide another number for you to compare.
We purchase Maryland houses as-is, so you generally do not need to make repairs, prepare the property for showings or pay real estate agent commissions when selling directly to us.
We can typically provide a written cash offer within 24 hours, and when the title and circumstances allow it, closing can often occur in approximately 7–10 days. You choose the closing date that works best with your situation.
How Our Home-Buying Process Works
Our goal is not to pressure you into selling. The goal is to give you enough information to compare your choices—including keeping the home, listing it traditionally or selling it directly—so you can make the decision that makes the most sense.
Frequently Asked Questions About Foreclosure in Maryland
How long does foreclosure take in Maryland?
There is no single timeline that applies to every foreclosure. Generally, Maryland requires a Notice of Intent to Foreclose at least 45 days before the court foreclosure action is filed. An Order to Docket may generally be filed after 90 days of default, although most mortgages are also subject to federal rules that generally require at least 120 days of delinquency before foreclosure begins. Additional steps occur before the actual foreclosure sale.
Can I sell my house if I am behind on mortgage payments?
Yes. Being behind on your mortgage does not automatically prevent you from selling. At settlement, the mortgage and other valid liens normally must be satisfied from the proceeds unless another arrangement, such as a lender-approved short sale, has been made.
What happens to my mortgage when I sell?
The title company typically obtains payoff information and uses the settlement proceeds to satisfy the mortgage and other valid liens before distributing the remaining proceeds to the seller.
Should I sell my house to avoid foreclosure?
Sometimes—but not always. If your hardship is temporary and an affordable loan modification, repayment plan or other solution allows you to keep the property, selling may not be necessary.
If the mortgage is no longer affordable and you have equity in the property, selling before foreclosure may allow you to preserve some of that equity. Compare all available options before deciding.
What if my foreclosure auction is already scheduled?
Act immediately. Contact your mortgage servicer, review your foreclosure documents, speak with an approved housing counselor and consider obtaining legal advice. You may still have options, but a scheduled sale significantly increases the urgency.
Will We Buy MD Homes guarantee that my foreclosure will stop?
No. No legitimate home buyer should make that guarantee. We can evaluate whether purchasing the property before a scheduled sale may be practical, but your mortgage servicer, court proceedings, title status and timing ultimately determine whether a transaction can be completed.
Facing Foreclosure in Maryland? Know Your Options Before You Decide
Foreclosure can feel overwhelming, but ignoring it is rarely the best strategy. Start by contacting your mortgage servicer and determining what assistance may be available. Speak with a HUD-approved housing counselor if you need help understanding your options. Then determine whether keeping or selling the property makes the most financial sense. If selling becomes the right choice and you want to compare a direct cash sale with your other options, We Buy MD Homes can provide a no-obligation evaluation and written cash offer. We're a local Maryland home buyer serving homeowners throughout Maryland, including Baltimore City and all 23 counties.
Call (410) 807-8767 or click Get My Cash Offer to tell us about the property. We'll explain the numbers, answer your questions and let you decide whether the option makes sense.
Important Disclaimer
We Buy MD Homes is a real estate investment company and property buyer. We are not a law firm, mortgage servicer, housing counseling agency or financial adviser. Information on this page is provided for general educational purposes and should not be considered legal or financial advice. Foreclosure laws, deadlines and individual circumstances vary. Homeowners facing foreclosure should consider speaking with their mortgage servicer, a HUD-approved housing counselor and/or a qualified Maryland attorney.