Taylor
McKenzie, 10-7-08
Don't Miss That 3rd
House Payment!
Were you aware that as soon as you’ve missed
three (3) consecutive mortgage payments in a
row, that most lenders will NOT let you pay
less than the full amount (all three payments
at once) at that point?
If you’re struggling right now to just keep up
with your mortgage payments until you can work
out something with your lender, or the
government’s bailout program steps in to help
you, then did you know that you can continue to
run 30 or 60 days behind
indefinitely?
Most lenders will continue to let you make one
payment every month, as long as you are NO MORE
than 60 days behind on your mortgage. This
isn’t going to help your credit score any, but
it does buy you some time.
What happens
if I miss that 3rd
payment?
Once you miss that 3rd mortgage payment and are
a full 90 days delinquent, your lender will no
longer accept less than 3 full months of
payments to bring you current.
They are also required to file an NOD (Notice
of Default) against your property, and this
marks the beginning of the foreclosure
process.
From here, the phrase “foreclosure process
started” is going to appear on your credit
report (and will remain there for 7 years even
if you bring the loan current) and your loan is
going to start to incur additional, pretty
hefty charges because of the process
itself.
Unless your lender can work out an arrangement
with you before your home “goes to sale”, and
you lose it forever, which takes a minimum of
90 days, then buying time by making at least
one mortgage payment before you are 3 months
down is the best way to go, if you can possibly
do it.
What if I’m
already 90 days late?
If you’ve already missed 3 months of mortgage
payments and your lender has already filed an
NOD against your property, the first thing to
do is contact that lender and see if they’ll be
willing to renegotiate your loan terms, so you
do not lose your home.
Mortgage lenders are NOT in the business of
owning real estate, and right now, the last
thing they want is to own another house. They
own too many already!
If you don’t get satisfaction at the first
level that you speak to, ask for their
supervisor and keep moving up the “food chain”
so to speak, until you actually talk with
someone who can answer your questions with the
authority to do so.
In business, I’ve found that “Those who scream
the loudest, get the best service.”
Don’t spend
the money!
A lot of folks will have some of their mortgage
payment, but possibly not all of it.
One of the biggest mistakes you can make if you
are in this situation, is to spend that money
on something else.
Just because the lender will not accept less
than 3 payments to bring your account current,
does not mean that you will not need to come in
with “some money” if you can negotiate a loan
modification with your lender.
A lender is going to be more willing to work
with you, if you’re willing to do your part and
bring some cash to the table during the
negotiation process.
Even if this turns out not to be the case,
you’re going to need somewhere else to live and
now that your credit is shot, you’re going to
look a lot better to a prospective landlord if
you have enough cash to come in with first and
last months’ rent, along with a security
deposit, so be smart about what you do with
that extra money.
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