So you’ve missed some payments on your mortgage. And now, you get the letter:
‘You must contact us immediately!’
In my case, it was a bit different. My property taxes went up, and so I wasn’t paying enough on the mortgage. Every short payment counted as another late, so they were already grumpy with me when I started having to miss payments. By the time I figured out you really have to talk to someone to make things right, it was too late for me.
You see, I made a mistake. I tried to make payments when I could, and buried my head in the sand thinking the thing would take care of itself. But I didn’t understand how my mortgage company worked. In my case, I missed January and February, and then paid in March. That March payment was applied to January, so I was still 2 months behind. Then I missed 2 more in April and May. 4 missed payments, and the proceedings began.
Your mortgage contract will spell out the terms of the foreclosure process, so go take a look at it now. But the truth is, every state has it s own foreclosure laws that describe how long they have before they can foreclose, and how long you have to try to fix things before they sell your house.
Typically, this is the sequence of events:
1) Your mortgage company will send you a letter telling you that unless you pay your past due balance, they will start foreclosure proceedings.
2) Shortly after that, they will hire a law firm to handle the case. The law firm will file with the county that your property is in to start foreclosure proceedings.
3) You will get a letter from the county, and they will run newspaper ads announcing to the world that you are about to lose your home.
4) If your state has a ‘right to cure’ provision, you can file a document with the county prior to the actual sale date, but you must be able to pay off the property with a new loan by the sale date in order to keep your property.
5) If you don’t try to keep it, the sale happens and someone else owns your home.
The timeline for this varies by state, but it isn’t long. In Colorado, it takes less than 60 days from start to finish. You might be able to get away with as many as four missed payments before they come after you, but the faster you get on track the better.
For more information about your state laws, check here: http://www.foreclosurelaw.org/.
The best thing you can do is CALL YOUR MORTGAGE COMPANY! Talk to them. Find out if they will be willing to let you move the late payments to the end of the mortgage. Or try to refinance. But if you have the ability to pay the mortgage, do NOT let your home foreclose! Your credit will suffer for years, and your options are limited.
For more information, see my entry: http://creditconundrum.wordpress.com/2008/03/12/cc12-what-will-my-credit-look-like-after-a-foreclosure/
To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link. You will be taken to a page where you can get more information about downloading the e-book. This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.
