Between 2020 and 2022, you may have qualified to place your mortgage in forbearance. After a pause in loan obligations, however, you may still find yourself unable to meet your expenses when your mortgage payments resume.
The Ascent reports that only half of the about 8 million borrowers in forbearance have caught up on their mortgage payments. About 264,000 homeowners have fallen behind on their loans even with up to 18-months of forbearance. Reportedly, 38,000 lenders started the foreclosure process to retake properties.
Borrowers may have options as mortgage payments resume
If you lost your job or experienced an income reduction, you may have options that allow you to remain in your home. As noted by Bankrate.com, some mortgage service providers offer a loan modification or forbearance extension.
By changing your payment’s due date, you may have the ability to catch up on past-due payments. Your loan servicer could also offer to extend the length of the forbearance. At the end of the extension, however, your servicer may add a charge to your loan payments. If you still find it difficult to meet your monthly obligations, you could consider filing for bankruptcy.
Maryland bankruptcy filers may apply for homestead exemptions
Without bringing your mortgage account up-to-date, your lender may begin the foreclosure process. Some homeowners believe a Chapter 7 bankruptcy forces them to sell their properties. Filing a petition because of financial hardship, however, may currently allow you to protect up to $25,150 of your home’s equity. You may keep your property provided you have owned it for a minimum of 730 days.
If you earn less than Maryland’s average monthly income for a household of your same size, you may consider Chapter 7 bankruptcy. By claiming a homestead exemption, you may remain in the property you occupy and continue with your mortgage payments to prevent foreclosure.