The possibility of losing your home to the bank is a frightening prospect that many Americans have had to face in recent years. In fact, the Mortgage Bankers Association reported record-breaking numbers of homeowners were behind on their mortgage payments in the third quarter of 2009, reaching nearly 10 percent. By seeking answers to delinquent mortgage questions you can prepare yourself with proactive solutions to foreclosure.
How Many Payments Can I Miss?
Your mortgage lender can legally begin foreclosure proceedings when you have missed one mortgage payment, but typically a lender will not take this step until you have failed to make three monthly payments. The catch is that most mortgage companies require you to bring your loan current at this point to forestall foreclosure. So if you find yourself 90 days behind, you will need to come up with the full three-month amount, plus any fees your bank chooses to assess. If you are less than 90 days delinquent, you may be able to negotiate an agreement in which your lender allows you to continue to make payments one month at a time provided you bring your mortgage current by an agreed-upon date.
What Are the Effects of a Delinquent Payment?
The first consequence of a delinquent payment is the late fee your mortgage company will automatically assess to your account after the grace period--typically 15 days past the due date. If your payment is over 30 days late, it will almost certainly appear on your personal credit report, not only lowering your credit score but making any attempt to refinance your existing mortgage more expensive in terms of the finance fees. In addition, once you have missed a monthly payment on your mortgage, you are in the position of having to catch up, paying a double payment plus fees. Before your delinquency progresses, you should call your lender to discuss a payment plan that you can work with.
Where Can I Turn for Help?
Banks, housing authorities and lawmakers have developed programs designed specifically to assist delinquent borrowers in catching up on mortgage payments to avoid foreclosure. Banks and mortgage lenders are generally ill-equipped to own and sell private properties, so you might find your lender eager to help you keep your home. You can discuss such options as setting up a repayment plan for the delinquent amount. Your bank might negotiate a temporary modification or suspension of your mortgage if you have recently lost your job. Your lender also might cooperate with you on refinancing your loan to lower monthly payments.
The United States Department of Housing and Urban Development--HUD--will work with your lender on a loss mitigation program before foreclosure proceedings begin. Provided you have experienced a loss of income through employment or an increase in your living expenses, you may qualify for this type of HUD assistance.
Legislation passed by Congress in 2009 offers further assistance to delinquent borrowers. If you are behind in your mortgage, federal guidelines that require banks to reduce monthly payments might provide assistance.
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