Just How One Defines Mortgage Delinquencies
Even if the payment is settled a day after it’s due, it’s still considered late. Although there are cases when late payment is inevitable, lenders and banks have different definition on what is considered late payment when it comes to the settlement of mortgage fees.
But you see, although a few days of late settlement of bills is tolerable, a constant or “chronic lateness” is potentially dangerous and could wreak havoc on your credit standing and leave your credit history tinted for years. Let’s take a look at some scenarios on what lenders and banks do in cases when late payment happens. Here are some scenarios:
- 15 Days Late Payment. If the fee is settled 15 days from the date it is due, the lender usually charges a late payment fee. The interest or late payment fee varies from lender to lender but these are usually in small amount.
- Two or Three Mortgage Payments Owed. If you find yourself unable to settle two or three payments with mortgage lender, you need to immediately get in touch with any of their collection personnel to personally talk to them about available options to take in order to avoid high interest or late fee charge and get your account back to current.
- Three or More Mortgage Payments Owed. If you reached this point, you will run at risk of losing your home. What happens at this point is that the entire mortgage loan is due and you will be legally liable to pay for it immediately as well as the attorney or legal fees sustained by the lender itself. Many homeowners reach to this point because some fail to respond to the letter sent by lenders or intentionally don’t do so.
Those who are suffering from prolonged or terminal illness may run at risk of losing their home in some circumstances but the federal government has instituted a reform in cases involving the same. The “deed in lieu of foreclosure” is reserved to people who just can’t recover from their financial predicament and just let the back foreclosed the house with no questions. This may not be as equally damaging to your credit standing but this also affects your reputation when renting an apartment or a home somewhere else in the future.