Maryland in 2023 stood among states with the highest rates of home foreclosures, and unfortunately, too many homeowners do not know where to turn, or wait too long, to seek help for their financial distress.

Working in the Maryland housing market for decades as both a broker and a credit repair specialist, and as someone who has faced foreclosure in the past, I know that the possibility of foreclosure can come with stress, shame and embarrassment.

Homeowners should know immediate steps are available to help protect their homes from foreclosure.

Ignoring phone calls, emails and letters from lenders will only make it harder to change course before the situation becomes unmanageable. The homeowner’s first step should be reaching out to the lender before a payment is missed. At that point, or if already behind on a payment, the best move is to have an honest, courageous conversation with the lender and develop a plan to get back on track.

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It’s important to know that foreclosures are expensive, and lenders often end up losing money through the process. It’s in the lender’s best interest to keep making money through mortgage and interest payments. So, possible options include loan modification or a change in payment schedule to get the homeowner back on track.

Documenting income through bank statements and pay stubs is another crucial step to avoiding foreclosure because the lender needs to fully understand the homeowner’s financial situation before it can present modification options.

The Maryland Homeowner Assistance Fund, which was a lifeline for many facing foreclosure, stopped taking applications in September. But homeowners can still get help through one of the 40 housing counseling agencies approved by the Maryland Department of Housing and Community Development. Housing counselors are an excellent free or low-cost resource that can help figure out financial situations and Maryland’s foreclosure laws. They can even negotiate with lenders on the homeowner’s behalf.

They can also connect homeowners with mortgage assistance programs if their current lenders are unable or unwilling to modify mortgages. When I found myself facing foreclosure, I used a foreclosure relief program called BlueHub SUN to help me get a new affordable mortgage and maintain homeownership.

That nonprofit organization refinances or buys homes in foreclosure and sells them back to their original homeowners with new mortgages they can afford. In my case, they were able to buy my home from my lender at a reduced price and sell it back to me with a new, affordable mortgage that allowed me to retain home ownership. In return for the significant savings on my mortgage amount, I also have a shared appreciation mortgage that I will pay upon maturity, or when I decide to exit the program by refinancing or selling my home.

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States including New Jersey are helping to support homeowners facing foreclosure by enacting laws that establish community wealth preservation programs. A law that New Jersey enacted gives homeowners the right of first refusal to repurchase their foreclosed home at the county sheriff’s auction. This kind of foreclosure protection law prevents investment companies from profiting off foreclosed homes and allows people to stay in their homes and communities.

We need to remove the shame and stigma associated with foreclosure by creating greater opportunities for homeowners to ask for help and by making more resources available to Marylanders.

Derrick Jason Smith is a Baltimore real estate broker and credit repair specialist.

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