Foreclosure is the process through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Ellicott City, Maryland has repeatedly failed to make their payments. Foreclosure normally results in the property being sold in an auction. Banks normally want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the easiest way to do this.
In all states in the United States, including Maryland, foreclosure by judicial sale is an option. This allows the sale to be conducted under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an attorney in Ellicott City, Maryland to see if this is the case. However, this normally doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Maryland?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be straightforward with them. Ignoring the issue will not make it go away. You should remember that banks in Ellicott City don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are straightforward with them, lenders will normally try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't work things out with your lender, there are other options. You could try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still gets those proceeds, but the remainder of the loan will be forgiven. You may also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Ellicott City, Maryland Attorney Help?
If you are worried about foreclosure, a good Ellicott City, Maryland real estate lawyer might be able to help. A lawyer can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.