Maryland Foreclosure Mediation
Maryland's mediation law that went into effect in July 2010 applies to all Orders to Docket filed July 1, 2010 or later. The law requires that mediation be mandatory but not automatic.
In Maryland, a borrower must CHOOSE to participate in mediation. If the borrower does not properly notify the court of his/her desire to participate in foreclosure mediation by timely filing the Request for Mediation form (and non-refundable $50 fee), no mediation will be scheduled.
- The Request for Mediation form that comes with the Final Loss Mitigation Affidavit must filed with the Circuit Court within 25 days of receipt.
If your Order to Docket contains a Preliminary Loss Mitigation Affidavit, the Final Loss Mitigation Affidavit will be sent to you via certified and regular mail at a later date. The Preliminary Loss Mitigation Affidavit will NOT contain the Request for Mediation Form. The Request for Mediation form ONLY comes with the Final Loss Mitigation Affidavit.
Mediation is only available for first liens on owner-occupied primary residences that are in foreclosure.
BE SURE TO REVIEW THE SECTION ENTITLED "SERVICER SPEAK AND IMPORTANT TIPS" UNDER THE MD FORECLOSURE RESOURCES SECTION.
What to expect
The mediation session will be conducted by an Administrative Law Judge that is acting strictly as a mediator. The mediator is there to help build understanding about the dispute, think about solutions, and reach an agreement. The mediator is a neutral party and therefore cannot make any decisions about the dispute. Think of the of mediator as more of a referee or counselor.
Mediation is not a court hearing or official proceeding despite the fact that the actual mediation session may be held inside of a courthouse.
All discussions that occur during mediation are confidential and cannot be used in any subsequent court proceedings. Additionally, the mediator cannot be called as a witness in any subsequent court proceedings.
Be sure to contact the OAH foreclosure clerk if you are going to be late. If you do arrive within 15 minutes of the start of mediation, the mediator will find that you failed to appear and cancel the mediation.
Strategy for mediation
Think of mediation as a business meeting. You need to prepared (in advance) to demonstrate how you will - objectively - be able to save your home. Please understand that there are no emotional considerations in this process so the fact that you don't want to lose your home or that the home has been in your family for years is NOT a defense to foreclosure. You need to be able to explain how you have a sustainable financial solution, that you can afford to begin making mortgage payments again and that you are able demonstrate that on paper! The lender will not give you the benefit of the doubt. If you can't substantiate your income, you will not receive loss mitigation assistance.
DOCUMENTS, DOCUMENTS, DOCUMENTS!
The documents that you must exchange are listed on golden yellow paper entitled "Foreclosure Mediation Instructions." This form will come in a letter packet from the OAH along with the Notice of Mediation (white paper) and Borrower Information Worksheet (green paper). You must send the requested documents to the OAH and substitute trustee at least 20 days prior to mediation. Documents, documents, documents!
20 DAYS PRIOR TO MEDIATION, YOU MUST SEND:
- Completed borrower information worksheet (green sheet of paper that is included in the letter packet from OAH).
- Your Request for Foreclosure Mediation form that you filed with the court.
- Each borrower's signed federal tax returns (including schedules and attachments) for the last two (2) years. You must provide proof of extension if you did not file a tax return.
- Most recent bill and proof of payment for property taxes and insurance (if not escrowed).
- Any previous loan modification.
- Most recent statement for any other loan you have on your property (if applicable).
AT MEDIATION, YOU MUST PROVIDE A COPY OF:
- Proof of each borrower's paystub (or benefit statement) issued within the last thirty (30) days, covering one (1) month of pay.
- Two (2) most recent paystubs (or benefit statements) issued within the last forty-five (45) days for any member of the borrower's household whose income is to be counted toward payment of the mortgage.
- All pages of two (2) most recent bank statements issued within the preceding 60 days. Note: the lender will only accept original statements, not printouts from the internet.
- Proof of income includes:
- Employment income. Most recent pay stubs covering one month of pay issued with in the last 30 days and indicate year-to-date earnings.
- Self-employment income. Most recent quarterly or year-to-date profit and loss statements for each self-employed borrower.
- Other earned income. (Bonuses, commissions, fees, housing allowances, tips, overtime). Must be reliable third party documentation. No "do-it-yourself" documents.
- Benefit income. (Social security, disability, death benefits, pension, public assistance, adoption assistance). Must evidence the amount and frequency of the benefits such as letters, exhibits, a disability policy or benefits statement from the provider, as well as receipt of payment (two most recent bank statements, etc.)
- Unemployment benefits. Must evidence the amount, frequency and duration of the benefits (this information is contained on the initial monetary determination letter).
- Rental income. This is documented on Schedule E - Supplemental Income and Loss for the most recent tax year. If Schedule E is not available, then provide a current lease agreement and bank statements or canceled checks evidencing payment made.
- Alimony, separation maintenance and child support. Borrowers are not required to include this information to qualify for a loss mitigation program, however, if a borrower chooses to provide this income it must be documented. Must evidence by a divorce decree, separation agreement or other legal written agreement filed with the court, or a court decree that provides for the payment of alimony or child support and states the amount of the award and the period of time over which it will be received, evidence of payment (two most recent bank statements or payment history from Office of Child Support Enforcement).
- Non-borrower household income. If a borrower wishes to include the financial information for any household member for purposes of qualifying for a loss mitigation program, the information must be documented. Two (2) most recent paystubs or benefit statements issued within the last 45 days.
The secured party or substitute trustee must provide:
- Notice of Intent to Foreclose.
- Order to Docket (including attachments).
- Final Loss Mitigation Affidavit.
- Borrower's payment history.
- Correspondence log of account activities from the time the loan went into default until the date of submission.
- Separately as to each loss mitigation option considered for the borrower, documentation of the basis for denial including: (1) the specific inputs and their sources, (2) explanation of each specific factor relied upon, (3) relevant portions of investor guidelines, and (4) property valuation.
MAKE SURE THAT THE SUBSTITUTE TRUSTEE PROVIDES YOU WITH THE ABOVE-MENTIONED DOCUMENTS!
You may request a postponement for good cause. Requests must be in writing and
received by the Office of Administrative Hearings no later than five (5) business days before the mediation. Include the case name and number, the original date of mediation, the reason for the request and any documentation that you have to show why you need a postponement. Also include three (3) dates within the next 30 days when you would be available for rescheduled mediation and a telephone number where you can be reached during business hours. Be sure to mail a copy of your request to all other parties in the case.
Mail to: OAH, 11101 Gilroy Road, Hunt Valley, MD 21031-1301
Fax to: (410) 229-4266
If no agreement is reached at the mediation, the foreclosure sale can be scheduled as early as 15 days from the date of mediation.
You also have the same 15 day period (after mediation) to file a Motion to Stay/Dismiss the Sale with the court explaining why loss mitigation should have been granted, challenging the standing of the lender to proceed or challenging the validity of the security instrument.
If the substitute trustee fails to appear or fails to provide documents, you can file a motion requesting that the court dismiss the case. You must also request a hearing.
Even if a borrower does not have a sustainable financial solution that supports a request for a loan modification, other issues like short sale, deed in lieu, waiver of deficiency, cash for keys, etc. can all be negotiated during the mediation.
For a comprehensive overview and FAQ for mediation, visit