Maryland’s Pre-Foreclosure Drop Masks Deeper Housing Insecurity

A Slowing Crisis? Behind Maryland’s Decline in Pre-Foreclosures Lies an Uneasy Truth

In September 2024, the number of Maryland homeowners entering pre-foreclosure reached 599, a modest decline of 3.39 percent compared to August. That’s the kind of trend line policymakers point to as a sign of stability, a gentle down slope on the kind of graph that suggests fewer residents are at risk of losing their homes.

But numbers tend to conceal as much as they reveal.

Behind that month-over-month dip lies a staggering longer-term shift: a 41.50 percent decrease from the same month one year ago, when 1,024 homeowners in Maryland found themselves teetering on the edge of foreclosure proceedings.

The decline is real. And so is the pain.

The Hidden Stories Behind the Decline in Pre-Foreclosure Filings

At first glance, this trend could seem like good news. But talk to housing counselors, legal aid attorneys, or the families who are one missed paycheck away from default, and the picture gets murkier.

Take Angela Martinez, a single mother of two from Prince George’s County. She works two jobs, a full-time position at a medical clinic and a part-time gig delivering groceries on weekends. In May, she fell behind on her mortgage after her car broke down and she had to choose between fixing it and paying her monthly installment.

“I wasn’t trying to avoid my lender,” she said. “I was just trying to stay afloat. But once you fall behind, it’s so hard to catch up.”

Angela avoided pre-foreclosure this time, thanks to a local housing assistance program. But the experience left her rattled.

For thousands like her, foreclosure remains a persistent threat even if it hasn’t yet materialized in the official filings. That 599 figure represents only those homeowners who’ve already received formal pre-foreclosure notices. Many more are quietly struggling, trying to forestall the process with stopgap measures, borrowing from family, maxing out credit cards, or missing meals to cover loan payments.

As one legal services coordinator put it: “The people who haven’t made it into the database just haven’t hit bottom yet.”

A Long-Term Look: From Housing Collapse to Pandemic Relief and Back Again

To understand this moment, it’s worth stepping back.

Maryland’s foreclosure crisis peaked in 2010, when a staggering 66,325 homes statewide were in pre-foreclosure a fallout from the subprime mortgage collapse and ensuing recession. The decade that followed saw a slow but steady recovery until the pandemic clouded everything again.

Federal relief packages, forbearance programs, and eviction moratoriums pushed filings to their lowest recorded total in 2021, just 561 across the entire state. But the relief was never designed to last forever.

In 2022 and 2023, filings rebounded to 5,208 and 11,069 respectively, as programs phased out and lenders resumed legal proceedings. By the end of September 2024, Maryland already recorded 5,940 pre-foreclosure filings this year. If the remainder of the year mirrors current monthly averages, the state will close out 2024 with fewer filings than in 2023, but still well above pre-pandemic levels.

This uneven recovery reflects broader structural weaknesses in the housing market. Inflation remains high, wages have stagnated, and affordable housing is increasingly rare.

The Economic Squeeze on Maryland’s Working Class

In interviews with families facing foreclosure or recently emerging from it, a common theme emerged: financial tension that predates their first missed payment.

For Marvin and Yvonne Clarke, retirees in Baltimore County, the trouble began when utility costs rose dramatically in early 2023. Inflation meant their fixed income couldn’t keep pace with their property taxes, now higher due to rising home assessments.

“We were house-rich and cash-poor,” Marvin said. “Our home was paid off, but everything else. The taxes, the repairs, the heating bill, just kept going up.”

They eventually faced pre-foreclosure proceedings over unpaid taxes but managed to secure a repayment plan through their county’s elderly homeowner assistance program. They’re safe, for now. But their story underlines a growing threat: even those without mortgages can find themselves on the edge of losing their homes.