Maryland real estate agents can now get a raise with a new state law that took effect in August 2020. The Real Estate Settlement Procedures Act has been approved by the Maryland General Assembly. The Act will reduce Maryland’s burden of foreclosing on a property by more than 50 percent for many distressed borrowers. Consumer Board members have until July 1 to submit proposals to the Real Estate Settlement Procedures Board for a proposed increase in their commission fees.
Please apply for online at the Governor’s Appointments office. This information is provided for informative purposes only and is not intended as an endorsement of any organization. You must be eighteen years of age or older, a resident of Maryland, and hold a valid real estate license before submitting an application for a Maryland real estate broker’s license.
The Maryland Real Estate Industry Association supports the new legislation. They believe that the law will be a positive influence on the state’s real estate industry, because it will give consumers more choice when they are shopping for real estate in Maryland. However, the Real Estate Settlement Procedures Act has no bearing on licensed Maryland real estate brokers who engage in predatory lending practices.
In January 2020, the President signed into law the Mortgage Forbearance Program, which provides financial relief to homeowners in the United States who owe money on their mortgages. The President’s Mortgage Forbearance Program will also provide assistance to Maryland homeowners who are in danger of foreclosure. Because this program is funded through the federal government, mortgage lenders do not have to shoulder the costs.
Because the Mortgage Forbearance Program benefits borrowers by lowering their interest rates and by allowing them to refinance at higher interest rates, the Real Estate Brokers Associations of Maryland has opposed this legislation. However, the state’s Real Estate Board, which serves as the regulatory authority for brokers in Maryland, has said it will not interfere with the ability of Maryland brokers to work to assist distressed borrowers. “The mortgage loan modification program is an effective method for helping homeowners in financial distress. Although some of the rules may be somewhat restrictive, the regulations are reasonable and will not impede brokers’ ability to help struggling homeowners,” said Realtor Robert Stelmach, president of the Maryland association.
The Mortgage Forbearance Program is based on the Home Affordable Modification Program (HAMP), which was introduced in 2020 in response to the global economic crisis.
Because of the Mortgage Forbearance Program, mortgage lenders in Maryland are not obligated to accept mortgages from borrowers who have less than fifteen thousand dollars in equity in their home. However, the lenders are required to accept a mortgage refinance proposal from borrowers who agree to pay the entire amount owed on their mortgage loan in order to qualify.
In addition to the state laws mentioned above, there are some local ordinances in place to protect distressed borrowers. These ordinances include a tax abatement policy that allows tax-exempt real estate owned properties in Maryland to be sold for a reduced price; a tax credit policy that encourage home owners who purchase tax liens to sell their homes at a reduced price; a moratorium for foreclosure auctions; and an ordinance that provide an exemption for homeowners who buy tax lien certificates for properties.
In October of 2020, a group of Maryland Real Estate Brokers Associations filed a lawsuit against the State of Maryland against the mortgage forbearance policy. The plaintiffs argued that the policy was a violation of state law because it did not provide enough time for the borrower to qualify for the program.
A hearing on the matter was held on May 8th. According to a press release from the Maryland Attorney General’s Office, in the ruling the court ordered the mortgage lenders to stop enforcing the policy. However, the judge also ruled that the state attorney general and Maryland Attorney General’s Office did not present sufficient evidence to show that the policy was a proper interpretation of state law and that it did not interfere with the ability of Marylanders to help distressed borrowers.
For more information on foreclosure prevention or in Maryland, contact the Department of Housing and Community Development. In Maryland, you can also check out the National Association of Realtors (NAR) or visit the Maryland Association of Realtors web site. To find a lender in Maryland in your area, visit the website of the Maryland Association of Realtors.