Missed Mortgage Payments & Stop Home Foreclosure
Missed Mortgage Payments / Stop Home Foreclosure
Missing a mortgage payment can happen to the best of us. Unexpected situations such as a job loss, a divorce, a medical condition, a new baby, or any substantial expense can wreak havoc on a lot of people’s finances, leaving them unable to fulfill financial obligations such as paying their mortgage on time. Unfortunately, this happens more often than you might think. If it happens to you once in a blue moon, it will not pose a problem. You can easily fix this issue by making the missed payment right away or before your next month’s mortgage payment is due. However, if the missed mortgage payment is carried over into the next month, then it becomes a “rolling late” situation, and that is a different scenario.
So, what exactly are the consequences of missing one mortgage payment?
When you miss a mortgage payment, you don’t just move forward with other payments and forget about it. What happens is if you miss a payment on one particular month, your payment for the next month is automatically considered late because it’s technically the previous month’s payment and you will be charged a late fee. In other words, you can miss a mortgage payment but you cannot skip a mortgage payment.
What is a Rolling Late scenario?
To better illustrate this scenario, imagine you miss 1 mortgage payment but make the following 12 mortgage payments on time. Your credit report will show 12 late payments, and you will be charged a late fee 12 times. This scenario actually has a name; it’s called a “rolling late” and will have a serious and negative effect on your credit score.
The only way to counteract a rolling late is to make two mortgage payments. For example, let’s say that you missed September’s mortgage payment and now October’s payment is due. You need to make both payments right away to stop the roll late from damaging your credit score.
How Does a Missed Mortgage Payment Affect Your Credit Score?
The good news is that one late mortgage payment will not completely destroy your credit score. But, keep in mind that if you let your late payment become a rolling late scenario, by never catching up, you will see a significant drop in your credit score. The longer a payment is late the worse it is for your credit score and overall financial health. A payment that’s 30 days late is bad, but a payment that is 90+ days late is even worse and could lead to other more serious financial issues.
Each of the two credit reporting bureaus in Canada (Equifax and TransUnion) has their own specific formula for calculating your credit score. This makes it difficult to predict exactly how a late or missed mortgage payment will affect an individual’s credit score. But, what we do know is that payment history is given the most weight. 35% of your credit score can be tied to your history of payment.
It’s also important to note that late and missed mortgage payments will also show up on your credit report and stay there for up to 7 years. This means that while your credit score might recover rather quickly from a missed payment, any future lenders will continue to see the evidence of your missed payment for the following 7 years.
What is Mortgage Payment Arrears?
“Mortgage Payment Arrears” is the term used to describe a situation wherein a homeowner failed to make several months of mortgage payments. Falling behind on mortgage payments means there is a real cash flow issue that should be addressed as soon as possible. It is easy for first-time homeowners to find themselves in mortgage payment arrears when they miss as little as 2 monthly mortgage payments. This varies from bank to bank but generally, missing 3 or more of monthly mortgage payments classifies that mortgage as being in arrears.
What happens if I have already missed several mortgage payments?
Missing a mortgage payment once or twice is no big deal, but if the number of missing payments escalates and you are already in Mortgage Payment Arrears, or if a foreclosure or bankruptcy looks like a possibility down the line, you should definitely consider looking at refinancing options, and as a last resort, selling the property. Too many missed payments will damage your credit score, but a foreclosure or bankruptcy will present long term credit woes and that’s something you want to avoid at all costs.
What happens if a Borrower Fails to Pay?
Once you are in mortgage arrears, it is difficult to find a lender who is willing to help you catch up. Especially since traditional big banks are not in the business of bailing clients out of a jam. If you are behind on your mortgage you will likely find that your mortgage lender wants little to do with you.
As such, the lender has several options to address the payment arrears. Consequences for the borrower may include any or all of the following depending on other factors and details:
- Foreclosure of the property
- The property can be sold by the lender under the power of sale provisions in the contract
- A lawsuit against the borrower on the grounds of failing to meet the obligation to repay the mortgage
- Possibility of the lender taking possession of the property or placing a tenant in to offset the borrower’s debt
- Additional debt if the lender is forced by circumstance to pay for condominium fees or realty taxes directly to the condominium corporation or the municipality to cover for the borrower’s unpaid obligation
We can help if you are facing any of these issues:
- Behind on mortgage payments
- Served a Statement of Claim
- Bank won’t renew mortgage because of poor repayment history
- Facing a Judicial Sale or Deed in Lieu
- Receive a Power of Sale Notice
- Received a Foreclosure Notice
- Served a Notice of Sale
- A lockout by the Sheriff
- Excessive property tax arrears
The responsibility always falls on the borrower to catch their mortgage up or face the consequences. Fortunately, here at 911 Mortgage Brokers, we specialize in Stopping Foreclosure or Power of Sale.
Contact Us For a Free Confidential Mortgage Consultation
Before things get more serious or even if you are at the point of facing a potential foreclosure, please contact us here at 911 Mortgage Brokers so we can work out a solution right away. There are quite a few different solutions if mortgage affordability has become an issue for you.
Our 911 mortgage brokers will analyze various options such as refinancing your current mortgage into one with a longer amortization period. The main advantage here is that by extending your amortization period your monthly mortgage payments would fall to a more affordable level. If your cash flow problem is short-term and expected to resolve, a second mortgage is a viable option as that would provide you with extra cash to satisfy your short-term expenses.
We understand that you won’t have a perfect credit report and may have income challenges and the lenders we work with understand too. Our alternative and private lenders privacy concern is the real estate they are investing in. Ultimately, they want to know that you have a plan to get back on your feet. Our 911 Mortgage brokers and agents will help you create a strategy to do just that. We will find the right mortgage solution for you so you can catch your breath, so to speak. Once you are back on your feet, our mortgage brokers can then switch you back to a traditional lender.
We understand that difficult situations arise in life which may wreak havoc in a person’s financial situation causing issues such as missed mortgage payments and potential home foreclosure. This is where an experienced mortgage broker comes in and can make all the difference. Our 911 Mortgage Brokers have the expertise and know-how to deal with these situations, swiftly and efficiently, to provide the right mortgage solution. We are known for providing out-of-the-box creative solutions. Having helped many homeowners keep their home, we can help you save your home by paying off all mortgage arrears and avoiding additional legal fees.
Depending on your financial situation and the details of your current mortgage/ number of missed mortgage payments, your 911 mortgage broker or agent will help provide the right mortgage solution to stop any home foreclosure procedures. In these circumstances, time is of the essence so our mortgage lenders are ready to fund mortgages on an expedited basis. We can fund mortgages in as little as 24-48 hours to just a few days.
Call Us Today at 289-318-0911 or Toll Free at 1-888-377-0911 for a free confidential consultation to discuss your options.
Our Service Areas
911 Mortgage Brokers – The Mortgage Centre offers services to clients across Toronto and the GTA, Vaughan, King, Aurora, Stouffville, Newmarket, Markham, Richmond Hill, Barrie, Innisfil, Orillia, Collingwood, Oshawa, Ajax, Whitby, Mississauga, Brampton, Caledon, Burlington, Oakville, Milton, Bolton, Hamilton, St. Catherines, Niagara Falls, Windsor, Kitchener, Waterloo, London, as well as far as Muskoka cottage country, Ottawa, Simcoe, and the rest of Ontario.
