Foreclosure investors in Maine will face an uphill battle in 2021. The Department of Housing and Urban Development (HUD) currently has a moratorium in place until February 28, 2021 on property foreclosures. This date is likely to be extended further, coinciding with the rollout of Covid vaccines. As we get closer to returning to “normal,” Federal guidelines and restrictions on foreclosures will be lifted and lenders will continue with foreclosure proceedings.
Total foreclosures were down 80%, 2019 over 2020. There will be a severe backlog of new foreclosures when these restrictions are lifted. I expect for foreclosures to start back up in the Summer of 2021. However, Maine is a judicial state, meaning that homeowners basically have a right of redemption and the opportunity to save their home.
The foreclosure process in Maine starts when someone gets behind on their mortgage and the lender of a mortgage files a Certificate of Foreclosure. Once the certificate has been filed, the homeowner typically has between eight and 15 months before a Judgement of Foreclosure is issued. Once this judgement is issued, then the homeowner has lost the home to the lender.
Investors likely won’t see many opportunities for low priced foreclosure listings in Maine until the beginning to middle of 2022. Even then, prices are not expected to be nearly as low as previous years.