Category: | Personal Finance

Managing Past Due Mortgage

Nothing damages your credit history more than a foreclosure so you will want to avoid it at all costs.
Add to that the emotional strain of losing your most valuable asset and the time and effort that has gone into building your equity in your home and you can see why it is ranked as one of the most distressing events that can happen in a person’s life.

The information here is a general overview of the terms that apply to most mortgages. You will need to check the terms of your mortgage to ensure that the same terms apply to you.

You will have 15 days after the due date for payment before you will be charged any penalties for late payment of your mortgage.
After that you will be charged a late fee and the bank will generally contact you to find out when payment will be made.
Once 30 days are up and you haven’t made payment the bank will most certainly be in contact and need information as to why you haven’t paid them. If you are still having difficulty making the payment then you should contact one of the government agencies such as the U.S Department of Housing and Urban Development to get some assistance to work with your lender to resolve your payment problems.

Between 45 and 60 days the process moves to the next level where the lenders attorney will get involved and issue you with a notice of default which will detail the amount you need to pay to clear the arrears unless you have already contacted your lender to come to an arrangement for payment.

After 60 days if nothing else has been worked out you will get a notice of acceleration which means the total amount of your loan and not just the past due amount is payable in full. You will also be told the date when your property will be sold to cover the mortgage if you can’t pay it beforehand.
This is the start of the foreclosure.

You still have time to avoid the loss of your house at this stage however the longer things are left the harder it gets to retain ownership. Even after 3 months and before the house gets sold the lender will usually be happy to come to a suitable arrangement where you can clear the past due and get your payments current again.
This also depends a lot on your past history and whether you have regularly missed payments.

If you fear that you will be unable to make the necessary payments due then make sure you take action as soon as possible. Contact a bankruptcy attorney as this will halt the foreclosure and allow you some time to decide whether there are any alternatives that you can look into.

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