ANNAPOLIS, Md – The emergency stay on foreclosures in Maryland has been extended through the end of March by Maryland Department of Labor officials—a press release recently announced.
The release notes that the state’s reporting system for certain foreclosures will remain closed through March 31. The first step in most foreclosures, to homeowners, is a letter of “notice of intent to foreclose.” The extended emergency stay keeps the reporting system closed, meaning that collection agencies, loan servicers, and mortgage lenders cannot send the notice.
Antonio P. Salazar, Maryland Commissioner of Financial Regulation, said in a statement, “After an analysis of multiple factors related to the COVID-19 health crisis, we made the decision to continue the prohibition on new foreclosures by keeping the statewide reporting system closed.”
The economic conditions within the state, trends within the residential mortgage market, and the status of the virus and associated government and public health responses are being monitored by Salazar’s office to determine if the stay on new foreclosures should continue.
Gov. Lawrence J. Hogan Jr. (R) put the original moratorium in place last April, and the stay on new foreclosures is set to expire at the end of February. Several executive orders have been issued since the introduction of the moratorium.
Nationwide, an extension of the moratorium on foreclosures on homes with federally-backed mortgages have been extended through March.
Homeowners who have fallen behind on their mortgage payments because of economic hardships caused by the COVID-19 pandemic will have added time to work with their mortgage lender to figure out possible solutions and take advantage of the many financial relief programs available, per Labor Secretary Tiffany P. Robinson.
This is crucial not only to ease the financial pressure on homeowners, but also to help preserve their credit score into the future. Failure to make mortgage payments and having property foreclosed can have a negative impact on one’s social score for years, and while companies like 1st UK mortgages offer options for lenders with low credit scores, it’s still a good idea to avoid letting your credit score get to low.
Despite the good news, these protections won’t prevent all foreclosures. Advocates warn that some foreclosures are still moving forward despite federal and state orders allowing almost a full year of forbearance for homeowners.
Director of Advocacy and financial stabilization at the Maryland Volunteer Lawyers Service, Amy P. Hennen said in December that foreclosures that began before Hogan’s stay have been proceeding in some cases. Hennen said that if a foreclosure has been filed in court, it can move forward—unless the court is unable to move it forward because of closures.
An order from Maryland Court of Appeals Chief Judge Mary Ellen Barbera states that lenders who want to move forward with foreclosures that were “initiated or pending” during Maryland’s state of emergency will need to prove to court officials that the property is exempt from the state and federal moratoriums for forbearances.
New legislation is being considered by the General Assembly that could give homeowners needed extra protection. House Bill 1009, sponsored by Del. Vaughn Stewart (D-Montgomery) and cross-filed as Senate Bill 724 by Sen. Jill P. Carter (D-Baltimore City) would arrange current orders on foreclosures to give homeowners more options to catch up on mortgage payments. A hearing is set for this week in the House of Economic Matters Committee for the House bill.
