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Sam
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Posted: Sat May 29, 2004 3:31 am Post subject: Delinquency - Failure to make mortgage monthly payment
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Delinquency is the failure to make your mortgage payments within the due date.
For Example, Robert has taken a mortgage loan to purchase a property. He makes late payments for some months. This situation is termed as delinquency.
In case of most mortgages, the payments are due on the very first day of the month. If a borrower fails to make the mortgage payments within the first 15 days of the month, he may not be charged a late fee. But the loan will be regarded as delinquent. If the loan payment is made more than 30 days late, then the lender may report the late payment to one or more credit bureaus. When three or more mortgage loan payments are due, the lender's attorney takes over the charge of the loan and decides to conduct a foreclosure. The foreclosure also requires you to pay the legal fees incurred by your lender.
What should you do when you default on your mortgage:
Most lenders don't prefer to foreclose on a mortgage. This is because it costs them a lot. Therefore, lenders often plan out for an alternative repayment scheme whenever a borrower defaults on the loan. The repayment plan is structured such that it becomes easy for you to pay off the mortgage loan. But lenders generally cooperate with a borrower only when the latter has a good payment history. If your past payments have been made on time and there has been no default, you can expect a better communication on the part of your lender. He will be supportive and willing to help you repay the loan with an easy financial plan.
But before you consult with your lender for an alternative repayment plan, consider some important steps.
- On the basis of your financial status, you should first prepare a list of your monthly income and expenses.
- You also need to show proofs of your assets and liabilities including the monthly payments towards debts.
- Your pay stubs and tax returns for the past two years should be submitted.
- You should carry out an appraisal of the property and then explain to the lender in writing as to how you can make your payments current.
Last edited by Sam on Mon Apr 09, 2007 2:12 am |
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