Foreclosure is not a problem that strikes out of nowhere. Despite this, some people in Maryland do not realize when they start on the initial path toward foreclosure, which is a period of time called preforeclosure. Better understanding when preforeclosure starts, what it entails and what actions to take may help struggling homeowners keep their properties.
If a homeowner misses three mortgage payments and falls 60 days behind on the loan, his or her lender will initiate the preforeclosure process. During this process, the lender issues a notice of default to the homeowner. The lender will include details about the missed payments and the legal measures it intends to take to collect the unpaid debt.
Homeowners should not mistake this preforeclosure notice as a sign that foreclosure is inevitable. Instead, this is the period of time during which a homeowner and lender usually work to come to some kind of agreement about the missed payments. For example, a lender might agree to a repayment plan, loan modification or short sale. A short sale is when a homeowner sells the home for less than what is still owed on the mortgage, and the lender agrees to accept that amount and forgive any remaining debt.
There is no time to waste when the preforeclosure process starts. For Maryland homeowners, this is the opportunity to reshape their futures by avoiding foreclosure. Unfortunately, working with lenders is not always easy. This is why some people find it helpful to seek out expert guidance early on during this process.