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How Does the Foreclosure Process Begin?

Missed mortgage bills
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Although it may feel like it, missing one mortgage payment does not mean you automatically enter foreclosure. Unfortunately, for those wondering how many payments can you miss prior to foreclosure, there is not one clear answer. Instead, when the foreclosure process will formally begin depends on many factors, from the repayment structure you agreed to and the bank backing your loan, to your past payment history and the loss mitigation options you qualify for.

 Potential Outcomes of a Missed Payment

 There are a number of scenarios which could play out following a missed mortgage payment, and not all of them lead to foreclosure. For instance, if you satisfy the payment amount within your lender’s grace period and adhere to the payment schedule moving forward, that would prevent the foreclosure process link to from ever starting. On the other hand, that missed payment could lead you to incur late charges that is typically five percent of the amount past due, though the exact amount depending on your lender’s policies.

 If the payment is still not made within any grace period offered by the lender, it is likely the bank will issue a written notice of default. You may receive multiple letters like this one as you continue to miss payments. After the second missed payment, the bank may report your case to the credit bureaus, which will impact your credit score. In fact, depending on your past credit history, it could drop your score as much as 100 points. Your credit will continue to be impacted as missed payments accumulate.

 Once your loan has been delinquent for 120 days, your lender has the option to begin the judicial foreclosure process. However, this does not have to be the outcome of your situation, even if you are unable to keep up with payments.

 During the entire pre-foreclosure period, you should be exploring debt relief options, ideally with the assistance of a foreclosure defense attorney. If your lender approves you for a loan modification or refinancing plan, that is far more favorable than undergoing the foreclosure process.

 The Bottom Line

 So, how many payments can you miss prior to foreclosure? At the end of the day, it all comes down to your repayment structure and lender. No matter what, the lender cannot pursue a foreclosure lawsuit before your loan has been in default for 120 days. Therefore, for the average homeowner on a monthly mortgage payment schedule, that might mean four payments. However, a lender may not choose to pursue foreclosure even then for a number of reasons. That said, even if that is the case, it is important not to ignore the seriousness of the situation. You should seek legal counsel to begin plotting a path out of debt to protect your credit, as well as ensure foreclosure is not being pursued without your knowledge.

 Are you falling behind on mortgage payments? Our foreclosure defense attorneys can help you explore your options and protect your rights every step of the way. Contact our office to schedule a free consultation.

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