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Backlog may allow homeowners to keep foreclosed homes

A backlog of foreclosure cases in many states is allowing some homeowners to remain in possession of their homes even when they are substantially behind in their mortgage payments. This could be true for cases that drag out too long in South Carolina as well. In many states including South Carolina, the courts have to approve foreclosure cases. However, many states are experiencing backlogs in their court systems, causing some cases to drag out for years. Once the applicable statute of limitations has been exceeded, however, some attorneys are arguing that the foreclosure action should not be allowed to continue.

There is no figure on how many homeowners could be behind on paying mortgage debt but still avoid losing their homes in this way. Many people who are significantly in arrears on their payments, however, continue living in their houses even after the foreclosure process begins. Bank of America has begun to foreclose on around 20,000 mortgages that have not been paid for a minimum of five years. In 90 percent of those cases, the homeowners are still living in the homes.

Although the court system is one source of the backlog, it is not the only one. The federal government has changed its programs for mortgage modification many times over the past few years, causing lenders to have to throw out previous terms and offer new ones to homeowners.

In some cases, homeowners have a few other options to avoid foreclosure, including bankruptcy. Chapter 13 helps qualifying debtors get caught up on their obligations, including mortgages, pursuant to a plan that lasts from three to five years so that they can keep their property. There are several eligibility and other requirements for Chapter 13 that a bankruptcy attorney can explain.

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