Three Common Questions about Foreclosures and Mortgage Late Payments

With today’s economy, it isn’t uncommon for mortgage borrowers to have late payments or even missed payments on their home. Some times, these missed payments can be worked out with the mortgage lender. However, depending on the circumstances, it could result in a foreclosure. Here are some common questions that today’s homeowner has about missing payments and foreclosing on their homes. Hopefully, the answers will clear things up and relieve some worry.

What are my options if I am late on a mortgage payment?
At the first inclination that you may miss a mortgage payment, contact your lender. They are more willing to work with you favorably if you alert them beforehand that you are going to be late. Once you become 30 days late on your mortgage payment, you will receive a notice in the mail. You will get another notice if you are 60 days late. The worst thing you can do, however, is ignore the lender. During these times when so many people are just walking away from their mortgage, lenders are willing to work with more people if the borrowers show an interest in working with them.

How do I know if I’m eligible for a mortgage modification?
Mortgage modifications are becoming more popular as banks are trying to keep borrowers from simply walking away from their loans. A modification often includes a reduction in the principle balance, the interest rates or an extension of the loan to reduce the monthly payments while stretching them for a longer period of time. If you are having problems making your payments, a loan modification is often up to the lender. Fortunately, the federal government is pushing loan modifications lately and mortgage lenders are as well to encourage people to stay in their homes. Modifications often require mortgage counseling, too.

Are banks foreclosing on homes as quickly as they used to?
A recent story shows that a large percentage of borrowers who are 60 days late on their mortgage payments are not being turned over to their lender’s loss mitigation departments. Because of those figures, it does seem like banks are not as quick to foreclose as they once were. If they foreclose on you, they are stuck with a foreclosed home that probably needs repairs before it will sell. They will likely have to sell it at a discount, too. It rarely works in the bank’s best interest to foreclose on your home so they are giving borrowers more chances these days.