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Phases of foreclosure

On Behalf of | Jul 13, 2022 | Bankruptcy, Blog |

Foreclosure is a protracted process that has a lot of steps. It is important to understand how it works and what might happen when a Maryland house goes into foreclosure because it can play a major role in bankruptcy.


The first phase of foreclosure is when the loan goes into default. When the borrower has missed three months of payments and is not able to respond to any arrangement to make up the difference, the lender can notify them that they are in default. The notice of default is officially the start of the next phase, where the lender can start foreclosure. The lender may or may not have to go through the court system to start foreclosure, and then they can start to make arrangements to sell the home.

The lender will notify the borrower about this process in case they can come to a final way of bringing the mortgage back to good standing, but at this point the lender is ready to foreclose. They will advertise the sale in some way, like a newspaper ad and signs, and they will make an official notice with the county or state government about the time and date of the auction of the house. If they sell the house directly through the auction, they are done. Otherwise they will sell it through an alternative means or relist it with more incentives. In the end, they will sell the house and evict the borrower.

This process can take a while, and the borrower has several opportunities to stop it by making an arrangement with the lender to get back on track.