How Many Payments Do You Have to Miss Before Your House is Repossessed?
Having your house repossessed means your mortgage lender or servicer has taken back your property after you have defaulted on payments. Homes can be repossessed because mortgage loans are a type of secured debt in which the lender has an ownership stake in the borrower’s property. Contractually, the bank is allowed to take back full ownership of the property if the borrower fails to make its payment obligations.
But not so fast.
Before your home can be repossessed by your lender or mortgage servicer, a borrower must be delinquent on their loan and generally have missed at least four monthly payments – or 120 days – before the foreclosure process can begin.
Missing monthly payments does not go unnoticed by a lender, and missing multiple monthly payments can negatively impact your credit and worse – lead to the loss of your home.
What happens if you miss a payment?
If it’s your first month missing a mortgage payment deadline, most lenders offer a grace period of 10-15 days in which you can still make the payment without penalty.
After the grace period, however, fees will start getting added to the monthly amount you owe and typically are assessed as a percentage of your payment amount. In order to catch back up on your loan, you will be required to pay back the missed payment amount plus any additional fees and penalties.
If you miss payments for two consecutive months, you will be in default on your loan, and your mortgage servicer will be contacting you. Don’t ignore these phone calls and letters in hopes of them going away. They won’t, and they will only get worse.
Missing payments is a stressful situation, but the earlier you address the problem, the more options you have in the fight to keep your home. You may be able to negotiate a loss mitigation with your lender, such as forbearance or a loan modification. Both of which can help temporarily alleviate some of the financial pressure you feel.
To learn more about your consumer rights and what you can do if you find yourself in default on your mortgage loan, schedule a confidential consultation with our experienced foreclosure defense team at Jacobs Legal.