Mid-Shore Pro Bono is urging homeowners to ask for help early if they are having trouble meeting their mortgage obligations. The nonprofit legal assistance agency reported that more than 800 foreclosures were filed in its five-county service area in 2009. It currently is working with about 75 homeowners in Caroline, Dorchester, Kent, Queen Anne’s and Talbot counties.
Participating in Pro Bono’s Foreclosure Prevention Project are Project Coordinator Beth Jacobson, a paralegal, attorneys Sasha Drobnick and Jonathan D. Suss, both in private practice, and Philip Cronan, an attorney with Hollis, Cronan and Coale. While grant funding helps underwrite Jacobson’s services, the attorneys each donate their time to the project.
They all emphasize the need for homeowners not to wait until foreclosure proceedings have been initiated to seek help.There are new defenses and remedies available to homeowners since Wall Street started securitizing their loans, including federally mandated loan modifications.
As soon as homeowners see they are going to be unable to make payments, they may contact Mid-Shore Pro Bono, where Jacobson can assist them in requesting loan modifications. “Beth is formidable in that area,” said Suss.
With nine years experience as a top loan originator with a major mortgage company, Jacobson helps clients work with loan servicers to adjust the terms of the mortgage. She is often able to secure lower interest rates and extend the term of the loan in order to reduce payments and avoid foreclosure.
Jacobson noted that a homeowner does not have to be late in making payments to get a loan modification. “If there is a job loss, illness or other change in circumstances and they see they will not be able to keep up with their payments, we can work with the servicers to help them keep their home,” she explained.
However, all too often, embarrassment, confusion and denial can keep homeowners from reaching out for help at the earliest stages of the process. “Many people come in to us with an order to docket in hand,” said Sandy Brown, Mid-Shore Pro Bono’s Executive Director. At that point, it becomes a matter for attorneys and a race against the clock to keep the house from being sold.
The legal process, with its maze of documents and filings, can paralyze homeowners. “People get overwhelmed and freeze,” said Drobnick. “The law provides a process for challenging foreclosures before the home is sold, but afterward, options start becoming more limited.”
Mid-Shore Pro Bono provided a simplified description of the foreclosure process. It begins when the homeowner misses three payments. After 90 days, the loan servicer—the company to which monthly payments are made—generally will not accept any payments unless the entire amount due is paid in full.
This is the point where the homeowner’s problems become open to the public. The loan is turned over to a foreclosure firm, and the appointment of substitute trustees is recorded in publicly accessible land records. Homeowners may find themselves suddenly harassed by individuals coming by their homes and taking photographs, offering to purchase their homes or selling other foreclosure-related services.
A notice of intent to foreclose is then sent to the homeowner. This is the first point at which the secured party is named—the entity that holds the note on the loan. Once a homeowner takes out a mortgage, the loan may be pooled with others and repackaged into securities that are sold to investors, sometimes changing hands numerous times. The homeowner may continue to make payments to the same servicer, which acts as a middleman in the process. However, it is the note owner or investor who determines what loan modification options may be acceptable, and that entity may be difficult to trace.
Forty-five days after the notice of intent is issued, the foreclosure action, called an “order to docket,” may be filed with the courts. This includes the homeowner being served personally with the foreclosure papers. Once the order to docket is filed, a foreclosure sale date may be set. The sale must be properly publicized in a newspaper and may occur no sooner than 45 days after the order to docket is served on the homeowner.
Often, receipt of the order to docket is what finally brings homeowners to Mid-Shore Pro Bono for help. They then have only fifteen days from the date they were served to respond and challenge the foreclosure. Until such time as the homeowner responds, the presumption is that the foreclosure firm does, indeed, have the right to foreclose, based on its sworn affidavits. Any challenges after a sale may only be based upon “procedural irregularities” of the sale.
Attorney Suss is quick to warn homeowners to protect themselves when dealing with foreclosure firms. “They still use the old-style steamroller and cookie-cutter practices,” he said. “They still think they can come in and do whatever they want and no one can stop them. But the rules were recently revised to afford better protections for homeowners.”
He and the other lawyers strongly advise homeowners to keep track of every call, letter or fax related to their case. “Whatever information you are asked to provide to the lender,” he said, “both fax it and send it by certified mail, return receipt requested.”
Suss noted that a firm sometimes will tell a homeowner repeatedly that it never received a fax. “Typically, the foreclosure firm goes to court and says the homeowner did nothing to modify his or her loan, while the homeowner insists that they sent everything over and over again,” he explained. “Make sure you document everything, even phone calls, and get people’s names.”
Even if they are in the process of securing loan modifications, homeowners should not ignore any notices of intent or orders to docket that they may receive. “A loan modification may take a year or more,” said Jacobson. “Meanwhile, foreclosure actions may be proceeding, with the homeowners being misled into believing that they don’t have to do anything about the order to docket.”
While Mid-Shore Pro Bono has guidelines that its clients must meet, those who do not qualify for the free assistance will be referred to attorneys who can help.
With the continued slow economy, Brown expects her foreclosure caseload to grow and welcomes donations and more volunteer attorneys to meet the demand. “Even a case of paper or box of file folders would help,” she said. “You wouldn’t believe the paperwork involved.”
For homeowners at risk of foreclosure, Mid-Shore Pro Bono offers aid in navigating that maze of paperwork and proceedings, along with hope for working out a way to keep their homes. Summing up her advice for homeowners, Jacobson urged, “Get here as soon as you can. Don’t wait or give up hope. You can beat them at their own game.”
For more information or to make a donation, call Mid-Shore Pro Bono at 410-690-4890 or visitwww.midshoreprobono.org.