COVID - Foreclosures

Foreclosures 

Residential Foreclosure Process Cannot Be Initiated Until February 28, 2021. On January 28, 2021, the Maryland Department of Labor’s Office of the Commissioner of Financial Regulation announced the extension of a moratorium on new residential foreclosures through February 28, 2021. If there was already a foreclosure action filed in court or you received a Notice of Intent to Foreclose prior to April 3, 2020, then the foreclosure case may proceed.

 

Foreclosure Protections

Forbearance. Homeowners experiencing difficulty paying their mortgage due to COVID-19 related circumstances may request a temporary suspension of loan payments, called “forbearance”. Be aware that with a forbearance plan, you will still be required to make up the suspended payments at a later date. 

Federal Mortgage Loan. On October 16, 2020, Governor Hogan signed an order providing that until the state of emergency is lifted, foreclosures of properties subject to a federal mortgage loan cannot proceed unless the loan servicer has provided a notice to the borrower at least 30 days prior stating that the borrower has a right to request a loan forbearance, and that the loan servicer has complied with all its obligations under the CARES Act.

 

Non-Federal Mortgage Loan. Foreclosures of properties with a non-federal mortgage loan cannot proceed unless the loan servicer has notified the borrower in writing that if the borrower is experiencing a financial hardship due to the COVID-19 health emergency, the borrower may request a forbearance for a period up to 180 days.


CARES Act Credit Reporting Protections. if you are current at the time you enter into forbearance or other repayment plan, the mortgage company should continue reporting your loan status as “current” to the credit bureaus.

 

Resources for Homeowners Facing Foreclosure

Department of Labor Help Guide: 

https://www.dllr.state.md.us/finance/consumers/mortforeres.shtml

Foreclosure Timeline (English): https://dhcd.maryland.gov/Residents/Documents/HOPE/TheNetworkForclosureTimeline_May2012v4.pdf

Foreclosure Timeline (Spanish): https://dhcd.maryland.gov/Residents/Documents/HOPE/TheNetworkForclosureTimeline_2014-Espanol.pdf

 

Housing Counseling

  • Housing Initiative Partnership, 301-916-5946. 

  • Money Management International, 866-232-9080 

  • Latino Economic Development Corporation, 202-588-5102

 

Participating Legal Service Organizations 

 

City and County Resources

 

Nonprofit Resources

 

Mortgage Relief

From the Department of Labor

 

  • Homeowners with reduced income may qualify for mortgage relief. The CARES Act includes authority for financial institutions to provide you with forbearance on federally-backed mortgage loans, should your mortgage qualify and should you need such assistance. 

  • Forbearance: temporary mortgage suspension; the lender agrees not to take legal action if a homeowner arranges to pay the amount owed on a mortgage by a specified date. 

    • Be aware that with a forbearance plan, you will still be required to make up the suspended payments either at the conclusion of the forbearance or a later date. If you can afford to make partial payments, discuss this option with your mortgage company first (you will need to enter into an agreement for a new repayment plan).

  • CARES Act credit reporting protections for borrowers: if you are current at the time you enter into forbearance or other repayment plan, the mortgage company should continue reporting your loan status as “current” to the credit bureaus.

  • You may be eligible for mortgage assistance through the CARES Act if:

  • According to the Consumer Financial Protection Bureau, approximately half of U.S. mortgages are owned by Fannie Mae or Freddie Mac. 

  • If your mortgage is NOT federally-backed, you still have options. Many of Maryland’s banks, credit unions, mortgage lenders and servicers are providing additional flexibility for eligible borrowers, including payment deferrals, waiving late fees, and refraining from reporting certain negative information to credit bureaus. 

 

Tax Sales

From the State Tax Sale Ombudsman's Homeowner's Tax Sale Help Center:

  • What is a Tax Sale? Any unpaid property taxes constitute a lien on the property from the date they are due until they are paid. A lien is a debt attached to your property, like a mortgage. County-specific local charges can be added to this lien. State law requires each County’s Collector of Taxes to sell these tax liens to collect delinquent taxes and other fees owed to the County. The tax liens are sold as “tax lien certificates” through what is called a “tax sale.” 

  • Tax sale is the process where the tax lien certificates are sold at public auction to the highest bidder. Each County issues bidding rules for its sale. Once the lien certificate is sold, the County’s lien on the property passes to the purchaser. 

  • Note: the unpaid debt and fees are sold at auction, not the real property itself. After the tax sale, the homeowner still owns the real property. The purchaser buys the debt owed and a right to foreclose on the property if the homeowner fails to pay off the debt within a limited time. After a tax sale, the homeowner can still “redeem” the property by paying off the debt owed in the lien certificate. 

  • Tax Sales vary by county. Check to see if your county has postponed or canceled its tax sale here: https://dat.maryland.gov/Pages/Tax-Sale-Information.aspx


 

Additional Assistance