Delinquent And Default Mortgages

If you’re struggling to make mortgage payments, this blog’s for you. You’re not alone in this challenging time. You’re not the first or the last person to find themselves in this situation. There are organizations and programs designed to help you stay in your home.  There are steps to take that will help you regain control of your finances. Familiarize yourself with these resources and take action to prevent foreclosure.

Reach out and recover

Once you get more than 30 days behind on your mortgage payment, it is considered delinquent. It is very important to contact your mortgage company directly before the 30-day grace period has elapsed. Throughout the process, communication and documentation are key. Keep good notes and records of each person you talked to and what they said.

If it is unlikely that you’ll be able to pay the mortgage in the future, due to a change in jobs or other lifestyle adjustments, you may be ready to sell the home. If your mortgage balance is more than the selling price, you need permission from the mortgage company to enter into a short sell agreement. After some negotiation, you may get the mortgage company to forgive or reduce the difference.

If you prefer to stay in your home and catch up on the payments when time’s aren’t so tough, request a forbearance agreement from your mortgage lender. If you have a government backed loan, it is currently covered by the CARES Act. In this case, you qualify with only a notice to the mortgage company that you’re unable to pay. Forbearance agreements last up to 6 months and can be extended, proof of financial hardship is not currently required.

Foreclosure is a last resort that most mortgage companies prefer to avoid. It adds the property to their list of liabilities and costs time and resources to move back off their books. Usually, this process is initiated with a default notice in your local court of law. Default proceedings generally begin after 6 months of delinquency.

First steps for financial foundations

Debt relief options are specific to your mortgage contract. The paperwork you likely didn’t read through thoroughly outlines opportunities to catch up, request forbearance agreements or short sell your home. In light of the Coronavirus pandemic, many companies are providing additional mortgage relief by waiving penalties, extending forbearance agreements and suspending credit bureau reporting for late payments.

Financial challenges start with money but often lead to mental and emotional turmoil. Once the downward spiral is in motion, regaining positive momentum is tough. Consumer Credit Counseling Services can help. Reach out now and set up a time to talk with a trained financial counselor. No matter the financial challenges you’re dealing with today, solutions exist to help you get back on a firm foundation.