Missing Payments On Your Refinance Loan

What happens when you refinance a home loan and then fall behind on your new mortgage loan payments? Much in the same way that a worker couldn’t continue giving labor to a business that won’t pay what the work is due, a lender won’t put up with a lack of payment on your mortgage loan indefinitely, either.

What happens to a borrower once mortgage loan or refinance loan payments become delinquent may depend greatly on state law, but there is a general timeline a borrower should expect the lender to adhere to in cases where a loan has gone into default and foreclosure is imminent.

Consider the timeline provided by the official website of HUD/FHA. This timeline is broken down into milestones related to missed payments.

With the first month’s mortgage or refinance loan missed payment, the FHA and HUD advise that your loan officer should be trying to get in touch with you by letter or phone.

The lender is going to step up efforts to get in touch by the time your second mortgage payment is overdue. It is important, the FHA official site says,  that you take the lender’s phone calls. “Talk to your lender and explain your situation and what you are trying to do to resolve it. At this time, you still may be able to make one payment to prevent yourself from falling three months behind.”

Once the third mortgage loan or refinance loan payment is missed, “you will receive a letter from your lender stating the amount you are delinquent, and that you have 30 days to bring your mortgage current” according to FHA.gov. This is called a "Demand Letter" or "Notice to Accelerate" and FHA.gov specifically warns, “If you do not pay the specified amount or make some type of arrangements by the given date, the lender may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made if you receive this letter.You still have time to work something out with your lender.

By the time you miss the fourth payment, your options are seriously dwindling; “if you have not paid the full amount or worked our arrangements you will be referred to your lender's attorneys. You will incur all attorney fees as part of your delinquency.”

Don’t let your home loan or refinance loan go overdue, into default or delinquency. Call your loan officer as soon as you know you might miss a payment and see what arrangements can be made. Doing so could help you prevent the situation from getting much worse.

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