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The Bigger Pockets Blog – The Real Estate Investing Social Network

I missed one mortgage payment two years ago, but I’m current on all the payments since then. Can my lender take my house?

No, your lender must notify you first. While missing a mortgage payment is serious, you do have options.

Missing one payment will most likely get your lender’s attention, but it won’t make them start foreclosure procedures. Contact your lender immediately. They could be flexible and offer a solution. We explain more below.

Be Proactive

If you think you might miss another payment, call before you miss the payment. Being proactive will give you more options than trying to deal with the situation after missing another payment. So call the mortgage holder or contact your servicing branch. The branch may not always be able to offer solutions, but they can refer you to an alternative department within the bank.

Missing one or more payments, however, tells YOU — this is time to evaluate your expenses. What is it that let you get behind on your mortgage?

The advice you’ll usually get about mortgage payments is “don’t be late.” Unfortunately, things are never that simple. If you are juggling bills each month, trying to decide which one to pay, then it’s time to take action. If you’ve missed a mortgage payment, you probably have cash flow issues to deal with. Having to decide which bills to pay and which not to pay is tough. We know. We’ve been there. And we can help.

What Should I Do?

Your first step should be to contact your bank or lender! The mortgage lender does not want to foreclose. Foreclosure costs them time and money. The lender wants to find a reasonable solution.

You probably feel reluctant to contact your lender. Most people do. They don’t want to bring cash flow problems to the lender’s attention. They feel contacting the lender might make the situation worse. It might make the lender more likely to foreclose. Beware of that thought! Remember the lender has systems in place to prevent foreclosure. The lender wants to keep the loan active and current. That’s their business – not foreclosing on houses. Having to force a homeowner out of a home only happens when all efforts and options have been fully exhausted.

Your talking to the lender will actually be received as a GOOD sign. Instead of seeing a problem, the lender will start looking for solutions.

What Kind of Solutions?

The lenders will usually look at a number of different options including:

  • A longer amortization period to lower monthly payments.
  • Switching from a variable to a fixed rate mortgage to provide a payment you can budget for.
  • Refinancing or taking a second mortgage.

There may also be an option for a payment holiday or adding missed payments to the back of your current mortgage.

What If This Doesn’t Work?

There are times when the house is obviously unaffordable and it simply doesn’t make sense to keep it. The lender will see any short-term remedy as simply delaying the inevitable.

In this case, make sure you seek professional advice on handling the process. The banks will be looking at ways to protect themselves. You should do the same.

There is limited action the lender will take at first. But the situation can escalate quickly. You will have more options to save your house if you act prior to default than after. HPAC can help you work out these options.

Remember

It’s easy to feel like you’re all alone when you’re struggling to make mortgage payments. It’s easy to feel trapped when you’re afraid of losing your home. But there is help available. There are ways out. You can turn to experts who have the experience to help you navigate through these tough times.

This is where HPAC can help you. We have the expertise to guide you through your options. Contact us. Let us help you today.

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