November 24, 2008
Several Maryland state government agencies, housing counseling agencies, and legal services organizations have joined forces to offer legal help to Maryland homeowners facing foreclosure.
Their combined efforts have produced the “Foreclosure Prevention Project” and the HOPE (Home Owners Preserving Equity) Foreclosure Prevention Program.
What the programs do
The projects aim to have volunteer attorneys help homeowners facing foreclosure. The attorneys help the homeowners assess their mortgage situation and decide which foreclosure alternatives might work. You can read more about common foreclosure alternatives at this link.
Perhaps most importantly, the volunteer attorneys will (when appropriate) also contact the homeowner’s loan servicer to attempt to negotiate the desired solution.
An attorney working on a homeowner’s behalf may be able to get prompt responses from lenders and loan servicers. This is important because many homeowners throughout Maryland report getting the run-around from their loan servicer when trying to negotiate a modification of their troubled mortgage.
How to contact
The hotline to call is: 1-877-462-7555
If you need legal help
If you need legal help, the HOPE Program counselors will help refer you to a pro bono attorney.
If you do not qualify for these programs, other help is available.
If you do not qualify for the program or you do not meet the income guidelines to qualify for a pro bono attorney, try contacting your county’s Bar Association.
Many have programs in which county residents can get a referral to an attorney who has volunteered to work at a reduced fee to help homeowners in foreclosure.
Click the link to learn more about the Bar Association of Montgomery County’s Reduced Fee Program.
November 19, 2008
What happens to tenants in Maryland rental properties when the property goes into foreclosure?
General information
In Maryland, if a property enters foreclosure, tenants may be forced out. This is true even if there is time remaining on the lease.
During the foreclosure process, ownership of the rental property is eventually transferred from the former landlord to a new owner.
Until the foreclosure process is completed, the original landlord retains the right to collect rent from tenants.
How long does a foreclosure in Maryland take?
Foreclosure timelines are discussed in this post.
A big part of the problem is landlords’ failing to notify their tenants that the foreclosure process has begun.
Tenants may not discover that a foreclosure has taken place until the new owners attempt to take possession. Such short notice obviously limits the amount of time the tenants have to find a new place to live.
[Note: In Baltimore, effective August 11, 2008, tenants in foreclosed homes must get at least 14 days notice (by certified mail and first-class mail) before the new owner can file an eviction notice against the tenants. And, a week before the eviction action is filed, the sheriff's office must post a written notice on the door.]
[Note: In May 2008, the U.S. House of Representatives introduced H.R. 5963, which is a bill called "Protecting Tenants at Foreclosure Act of 2008. " The U.S. Senate introduced an identical bill S. 3034. These bills, if passed, would give additional rights to tenants whose dwellings are foreclosed upon. Click here to read the text and check the status of the bills.]
After the foreclosure is complete
Once the foreclosure process is complete, the new owner may be willing to execute a new lease with tenants.
But, the new owner is often the foreclosing lender. Lenders are usually reluctant to sign leases and act as landlords.
And, if it is not interested in entering into a new lease, the new lender or other new owner can then evict the tenant according to the usual eviction procedures in the jurisdiction.
Eviction procedures and tenants’ rights
In Maryland, the usual eviction procedure involves the new owner filing an eviction suit against the tenants in District Court. The tenants then receive a formal court summons and a court date. [Eviction procedures vary slightly in some Maryland counties.]
Tenants should be sure to attend this court date. At the court date, a tenant can explain his or her situation to the court.
If the tenant was given very little notice of the foreclosure and / or is having trouble finding a new place to rent, he or she can ask the court for additional time to find a new place to rent. (However, tenants should not assume that the court will grant the request for additional time.)
Alternatives to eviction aka “cash for keys”
In order to avoid filing an eviction action and going to court, the new owners may offer the tenant money or Âcash-for-keys as an incentive to move out quickly.
But, tenants should get any such offers in writing and should carefully review the written proposal. These proposed agreements often require the tenants to waive claims they may have against the old or new owners.
Tenants’ claims against the original landlord
Even after the foreclosure, tenants retain claims against the original landlord for breach of the original rental agreement.
The tenant can sue the landlord for breaching the lease agreement by failing to provide the rented property for the entire lease term.
The tenant may also have claims against the former landlord for moving costs, apartment hunting costs, rental application fees, and differences in prices between the old (foreclosed) dwelling and the tenant’s replacement dwelling.
The tenant may also need to sue the former landlord in order to recover any security deposits. In some cases, the tenant may also be entitled to additional damages when the former landlord fails to return security deposits.
[The above post includes excerpts from a press release from Maryland's Office of the Attorney General. For the complete press release, click here.]
November 18, 2008
What happens to tenants in the District of Columbia when their landlord is foreclosed upon?
Fortunately, D.C. ‘s tenant-friendly rental laws offer protection in this situation. In many jurisdictions, the new owner can evict the tenants after taking possession of the property. But, tenants in D.C. cannot be evicted merely because ownership has changed hands due to foreclosure.
The law
The Rental Housing Act of 1985 (DC Code § 42-3505.01) states the circumstances under which a landlord in the District of Columbia may validly evict a tenant.
Under this law, foreclosure is not a legally valid reason to evict a tenant.
In other words, it is illegal for a landlord to evict tenants in the District solely because the dwelling is being foreclosed.
Payments during foreclosure process
Foreclosures take time– sometimes several months– to complete.
In most cases, tenants must continue making timely rental payments to their original landlord during the foreclosure process.
If a renter fails to make timely rental payments, he or she can then be evicted for failure to pay rent.
Payments after the foreclosure
After a foreclosure, the new owner becomes the tenant’s new landlord. Sometimes the new owner is a person; sometimes it is the foreclosing lender.
Tenants should pay rent to the new owners once the foreclosure process is complete.
What tenants should do
If you are a tenant who has been notified that the dwelling you live in is in foreclosure, you should take the following steps:
Let the new owner know you are there. If you have received a notice stating that the dwelling you live in is under foreclosure, notify the party who sent you the notice that you are a tenant in the dwelling.
Assert your rights in writing. In addition to letting the party know you are living in the dwelling, you should also notify them that you are asserting your legal right to stay in the dwelling. You can use this form. Send this form to the party that sent you the notice about the foreclosure. To be safe, send it certified mail, return receipt requested so you can prove it was received.
Rent payments during foreclosure. Foreclosures take time. During the time the foreclosure is in process, you should continue sending your payments to your original landlord. Be sure to send in your rent payments on time. If you do not make your payments on time, you give the old and possibly the new owners grounds to evict you.
Rent payments after foreclosure. If (after the foreclosure) your home has a new owner or is owned by the bank, you should start sending your rent to the new owner or to the bank. Try to contact the bank or its attorney and ask for the address where you can pay rent
Send written requests to the new owner, bank, and / or bank’s attorney asking for complete information as to where you should send your rent payments and how you should make payments payable.
Keep copies of all documents. It is very important that you keep copies of all documents you send or receive, including: the notice of foreclosure, your statement that you want to stay in your apartment, and your letters requesting information about where to send your rent payments.
[The foregoing is partially excerpted from a press release from DC's Office of the Tenant Advocate. For the complete version, click here.]
November 15, 2008
DC’s Department of Housing and Community Development has scheduled a series of public hearings to discuss the District’s housing needs.
Citizens are encouraged to attend and to give testimony.
Registration
To register, call (202) 442-7251 or email pamela.hillsman@dc.gov
Topics:
- Affordable housing
- Special needs housing
- Homelessness
- Homeownership
- Community development and
- Public service activities
Dates, times, and locations:
Thursday, November 20, 2008
6:30 pm
Greater Washington Urban League
2901 14th St NW
Tuesday, November 25, 2008
6:30 pm
Matthews Memorial Baptist Church
2616 Marting Luther King Jr. Avenue, SE
November 14, 2008
This post discusses some of the questions our office receives about debt collection lawsuits. They are listed in question and answer format below.
A collection agency has sued me on a five-year-old credit card debt. Can they do this? And why are they suing now?
Debt collectors routinely search databases to determine if their Âaccount holders have recently started new jobs, purchased houses, or acquired other assets.
The debt collector will then file suit against these people, because the collector figures it stands a good chance of recovering something from people with good jobs or assets.
But, there are statutes of limitations that apply to debt collection. In other words: if you are sued on an old debt, you can raise the defense that the debt is too old to collect.
But, you must specifically raise this defense, usually very early in the lawsuit. Contact an attorney immediately if a debt collector has sued you.
Even though you must raise the defense yourself, debt collectors violate certain laws if they knowingly sue on debts that are past the statute of limitations. This is another issue either you or your attorney should research.
If a Creditor or Collection Agency Sues You
Even if you are unable to get an attorney, you should go to court and force the collection agency to prove its case.
Sometimes the extra charges and fees collection agencies seek are not valid. But, you must be in court to object to these charges. Otherwise, the court might assume the charges are valid.
It is very important to file a response with the court and to meet all filing deadlines.
Default Judgments
It is critical that you attend all hearings and trials. If you do not appear in court on your court date, the judge may issue a default judgment giving the collection agency the full amount of its claim.
But, you may not owe the full amount the collection agency claims you owe. So, it is very important for you to present your side of the story to the court.
Garnishments and Liens after Judgment
If the court enters a default judgment (or final judgment), the debt collector may be able to file a lien or attachment on your property or garnish your wages or bank account.
On the other hand, there are ways to prevent and / or fight liens, attachments, and garnishments. This is why it is very important for you to attend all your trial and hearing dates, even if you do not have an attorney.
What if the court has entered a default judgment in my case?
There are still some things you can do. Contact an attorney or research your courtÂs procedures for more information. Do so immediately; there are strict deadlines you must observe.
What if I went to court, but lost my debt collection case?
You may be able to appeal the courtÂs decision. Again, there are strict deadlines, so you will want to research your options for appeal or contact an attorney as soon as possible.
Even if you are not able to appeal your case, you may be able to take steps to resolve the matter, thereby avoiding garnishments and liens.
November 11, 2008
Our office has recently seen a spike in the activity of debt collectors who are not licensed in Maryland.
Maryland consumers who are contacted by a debt collector that is not licensed in Maryland should file a complaint with Maryland’s Department of Labor, Licensing and Regulation.
Check here to check whether the debt collector who contacted you is licensed in Maryland.
Keep in mind that improperly licensed debt collectors are theoretically ineligible to sue consumers in Maryland courts.
However, many improperly licensed debt collectors do attempt to sue Maryland consumers in Maryland courts. The debt collector’s improper licensure must then be raised by the consumer at trial or in a pre-trial motion.
As with all trial issues, the consumer must raise the issue. The court generally will not raise the issues on the consumer’s behalf.
It is therefore critical for consumers to attend all court hearings and present their side of the story if they are sued by a debt collector.
November 9, 2008
On November 7, 2008, Maryland Governor Martin O’Malley announced a voluntary agreement his office reached with some of the nation’s largest loan servicers. The agreement’s provisions are intended to help Maryland homeowners behind in their mortgage payments avoid foreclosure.
Specifically, the participating loan servicers have agreed to use certain procedures when working with Maryland borrowers who are trying to modify terms of their mortgages.
Suspend foreclosures and fees
Among other provisions, the servicers have agreed to temporarily suspend foreclosure actions and the accrual of fees and penalties during the time it takes the lenders to process a loss mitigation application.
[A loss mitigation application is the information a borrower submits to a loan servicer when the borrower requests to modify the terms of a loan.]
Improve customer service procedures
Other provisions aim to improve the servicers’ customer service practices. The servicer must acknowledge receipt of a loss mitigation application within five days, and servicers must process loss mitigation applications within two months.
Servicers also agreed to (1) designate employees to help Maryland homeowners, (2) encourage staff to modify loans rather than foreclose, and (3) disclose their loss mitigation guidelines to consumers.
Participating Servicers
The loan servicers participating in the agreement include:
- AmeriNational,
- HSBC Finance,
- Citigroup,
- GMAC,
- Ocwen Financial Group, and
- Litton Loan Servicing.
Ware Law Office LLC Page
