Although foreclosure rates around the country are decreasing, there has been a significant spike in the rate of foreclosures being filed in Maryland. After speaking with Baltimore City’s Foreclosure Auditor, James Wiggins, since December 26, 2013, an approximate 4,000 foreclosure cases have been filed in the Baltimore City jurisdiction alone – that accounts for more cases filed in Baltimore City than were filed for all of 2013! Wiggins expects that, at a minimum, an additional 5,000 foreclosure cases will be filed in Baltimore City this coming year in 2014. Although the numbers seem high, when taken into consideration that there has been an almost negligible foreclosure caseload in the city over the past several years, the uptick in filings doesn’t surprise anyone who has been monitoring this situation.
In the wake of the “Robo-Signing” scandal that rocked the nation and also hit close to home, affecting lawyers at several well-known foreclosure law firms in Maryland, the fear that documents being filed in foreclosure cases are not 100% pristine has forced lenders and their lawyers to be more cautious with what is being filed and had significantly slowed the foreclosure filing numbers. Since Maryland enacted its tougher, document and notice intensive foreclosure process, the foreclosure filings over the past several years in many parts of Maryland had come to an abrupt halt. Bank attorneys blame the halt on an uneasiness with what exactly Maryland law demands. As such, a “touch and go” philosophy has arisen, whereby bank attorneys have become more judicial and have provided more scrutiny to the documents that they are filing in these foreclosure cases.
With the onslaught of foreclosure cases having been filed in Baltimore City in the last several weeks, it seems that law firms are becoming more comfortable with Maryland’s process and the requirement to submit to mediation when requested to do so by the borrower. Still, the word amongst foreclosure and bankruptcy attorney circles is that the compulsory mediation program has been far less than fruitful in keeping borrowers in their homes. As a result, many borrowers have been forced to file for bankruptcy in an attempt to stave off foreclosure and save their homes.
What is clear is Chapter 13 Bankruptcy is still a viable means of saving one’s home. In many cases, banks are working with borrowers to modify loans after a person files in bankruptcy. The belief shared by many bankruptcy counsel is that banks typically want to avoid the cost and effort involved with the Chapter 13 process and many times will offer mortgage modification assistance to a borrower that has filed in bankruptcy. Call us at 410.234.0100 to learn more.