From just about every perspective, missing a mortgage payment on purpose in the hope of convincing your lender to modify your loan is a bad idea. In days gone by, when the mortgage market worked a bit differently, skipping a payment or payments might have helped your lender get the message that your mortgage payments were simply too high and they needed to help you by changing them to something more affordable. That is not the case today, however.
In fact, skipping payments can cause other major problems down the road. For example, your credit report will suffer and your chances of obtaining credit cards or a car loan will dwindle along with the chance of refinancing your mortgage or obtaining another one in the future. As if that weren't enough, the missed payments are still owed, but now they'll include extra interest and penalties.
The Federal Government has a new plan available also called Making Home Affordable which is a better route to take for those needing to modify their current mortgage. In fact, if you've missed a payment by over 30 days more than once in the last 12 months, you do not qualify for this plan, so all the more reason to not miss a mortgage payment if at all possible.
You do qualify, however, if you are at "risk of imminent default". This may include a mortgage payment that has recently changed to a much higher amount, a significant loss of income or other hardships
So while missing a mortgage payment to garner the attention of your lender and convince him of your need for a modified mortgage may look good in the history books, it is not a good idea in this day and age. If you are having trouble paying your mortgage, your best bet is to talk to your lender and discuss a loan modification. Lenders are more willing these days to take action to prevent foreclosure. If you can prove any type of hardship, they are likely to work with you. On the other hand, if you can't make a case for hardship and appear able to pay your mortgage, they are likely to stick with the old "a contract is a contract" line of thinking.
Let the Marla Schneider Team help you through the in's and out's of buying and selling a home. Find out the value of your current home to help you make better decisions.
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