Q: I recently lost my job and I’m worried I won’t be able to afford my mortgage payments soon. Can I skip a payment or two while I find another job? How many mortgage payments can I miss before foreclosure happens?
A: The foreclosure process does not happen overnight, and the exact time frame depends on which state you live in. However, there are federal rules surrounding how many mortgage loan payments you can miss before foreclosure proceedings will begin. Essentially, you have about 90 days — or three missed payments — before your lender will begin pursuing foreclosure:
Missed Mortgage Payment #1
Most lenders will offer a grace period for mortgage payments — usually about 15 days — during which you can be late sending in your payment but aren’t considered to be in default. However, if you don’t make your payment within this time frame, a late charge will be added to the balance owed. Additionally, if you fail to send in your mortgage payment after the grace period, your loan servicer will call or mail a letter to let you know you’re delinquent on the loan.
Missed Mortgage Payment # 2
If the above scenario happens a second month in a row, your lender will become more aggressive in contacting you about your missed payments, most likely calling you by phone to discuss why you are delinquent and how the two of you can solve the issue. Take the call, as you may be able to negotiate a solution early.
Missed Mortgage Payment #3
By the time you reach three months of missed mortgage payments, you will be considered in default on your loan — the first step on the road to foreclosure. Your mortgage servicer will send you what’s known as a “demand letter” or “notice to accelerate,” which is a document that notifies you that you’re in default, how much money is past due and gives an official 30-day warning to bring your loan payments current or else foreclosure proceedings will begin.
Missed Mortgage Payment #4
By this point, if you have failed to bring your mortgage payments up to date or taken steps to negotiate payments with your lender, foreclosure is all but imminent. Your servicer will bring legal action against you and begin foreclosure proceedings. This is generally a fairly lengthy process that can take several months, and you will be responsible for some legal fees as well.
It’s important to do whatever you can to prevent foreclosure proceedings to go through — once your home is sold at auction, it’s gone for good. If you begin having trouble paying your mortgage on time, seek assistance at the first sign of distress. Don’t wait until it’s too late to work out a deal with your lender or government program.