Sponsor seeks to raise Maryland homestead exemption to protect older and low‑equity homeowners

Delegate Vaughn Stewart told the committee Maryland's current homestead exemption—about $31,575—has been eroded by rising home prices and no longer protects many homeowners from losing equity in sheriff sales or judgments. His bill, HB 10-98, would raise the base exemption to $150,000, double it for veterans and certain seniors/disability households to $300,000, index both amounts to inflation and extend coverage when a home is held in a revocable living trust.

Stewart and supporting witnesses argued the change would preserve modest homeowner equity, reduce community impacts from foreclosure and support chapter 13 bankruptcy reorganizations for struggling homeowners. William Steinwiddle (Maryland Legal Aid Bureau) and AARP Maryland volunteers described cases where the lack of a meaningful exemption blocked families from using bankruptcy to preserve homeownership and forced destabilizing sheriff sales.

Opposition from mortgage industry written testimony was referenced but not heard in person; sponsors cited peer‑reviewed studies finding limited effects of homestead exemptions on mortgage rates and noted other states with much larger exemptions continue to have functioning mortgage markets. Committee members asked technical questions about trade‑offs for lenders and potential effects on credit availability; witnesses said evidence indicates limited systemic credit impact and emphasized social benefits of reduced displacement.

The hearing closed with proponents urging the committee to modernize Maryland's exemption to reflect current home values and inflation.