So, I’m Late On my Mortgage Payment, What Are My Options?

By
Real Estate Agent with Keller Williams Realty

Preventing ForeclosureIf you find yourself asking that very same question, you’re not alone. In fact, according to the Mortgage Bankers Association, roughly 1 in 10 borrowers with outstanding mortgages in the U.S. are behind in their payments. Fortunately, you have options to prevent foreclosure. And more importantly you will be in a better financial andemotional place in the future by acting now.

Before we can get into what your options are as a distressed homeowner, it’s important to look at the events happening based on where you are on the overall time-line.

30, 60 & 90 Days Past Due (or longer): At 30 days you may not have heard from your lender about missing your first payment, but that doesn’t necessarily mean that they haven’t already reported this action to the credit agencies. It’s possible you may not hear from your lender until you are 60 past due. Once the credit bureaus have record of the delinquency, the process begins which havoc is starting to occur to your credit score. In fact, each reported delinquency further damages your credit.

Also at 30 days, your lender has the right to file a “Notice of Default” (NOD) to your county recorder or court house and set a “Trustee Sale” date (the date which the home will be foreclosed on). When a NOD has been issued, it becomes public record. And if the credit agencies are provided this information, further damages are accumulated on your credit score. It also means that anyone who is curious can find out that you’re behind on your payments and may be in some financial difficulty. But, most importantly, the number of options your lender will agree to is reduced dramatically once a NOD has been filed.

So, What Are My Options to Prevent Foreclosure?

Your lender will typically offer a variety of solutions to those borrowers who are past due on their mortgage payments. Such as:

- Loan Modification: This can be in any number of different forms depending on your lender. From adjusting the interest you currently paying, temporarily reducing or eliminating payments, & reducing the principle amount you owe.

- Short Sale: Simply stated, a short sale is when the amount you owe is greater than the current market value and the bank agrees to accept less than the full amount in order for you to sell your home. It is important to know that if you are working on a Short Sale, it does not mean that the lender will put a “stop” on the foreclosure process. Most lenders will continue with foreclosure proceedings even if a Short Sale is being reviewed or worked on.

- Deed in Lieu of Foreclosure: A Deed in Lieu is the option to give your home back to your lender, take the loss and as a result prevent the foreclosure. Many lenders are frequently accepting this option because, it is a less expensive and time consuming for them versus foreclosure.

Additionally, it's important to know that other options which are typically considered out "out of the box" are available.  And each homeowner should consult with their local Real Estate Professional who specialiazes in distressed properties to see what is right for their particular situation. 

 

If you live in the comunities of Roseville CA, Rocklin CA, Granite Bay Ca, & Lincoln CA and you have questions about your alternatives to foreclosure.  Please call today (916) 580-6141 for a no obligation consultation or visit my website www.aaronmadsen.net.

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