Hey guys, this is Mike from Mike Buys Houses, and I just got off a call with a homeowner who had missed a few mortgage payments and was asking me how many payments can they miss before they start facing foreclosure. I thought that was a really interesting topic, so I wanted to share our discussion points here for you as well.
Mortgage Payment Plans with Your Bank
First off, the key thing to remember is that banks don’t want to take the house back. They are not in the business of taking houses back, so they will try and work with you, if they can. If they see any way that you’ll be able to start making payments again, then they will definitely be interested in working with you, because, it’s very costly and timely for them to get houses back. When the bank is spending time getting a house back, they’re obviously not collecting money, which is their preferred method of making money.
Since this is not something that the bank is really interested in doing, I’ve seen instances where people were behind for months to up to 2 years at times! Typically, banks will wait 120 days and then start up the process, but it really depends on the bank and the situation to determine how far the bank will let things go.
The farther behind that you get on your mortgage, obviously you’re going to have more and more money due. Typically, if there is a path where you’re going to be able to start making payments, the bank will work with you.
Therefore, it is always best to reach out to the bank if you have missed payments to try and work with them to set up a payment plan in order to restart the process of paying the mortgage off in time.
Foreclosure Notices and Warnings to Expect
The next thing we discussed was, if you are missing payments, what can you expect before foreclosure? What types of notices or warnings will you be receiving?
Sometime during that 120 day period I mentioned earlier, you will get something called the Breach Letter, which basically just says that you’re behind on payments. The bank is just acknowledging that you are delinquent in payment so there is a paper trail showing they tried to warn you that you missed payments and showing that the bank made an attempt to collect.
From there, you will have 30 days to get your loan current, and after that 30 day process, that’s actually when the foreclosure process is going to begin. So again, somewhere in those first 120 days, you’re going to receive the breach letter and that starts your 30 day timer to get caught up on your mortgage before the foreclosure process begins.
What does the Foreclosure Process Look Like?
The foreclosure process will begin with a certified letter from the bank. Upon receipt of this, you are going to want to fill out whatever your bank’s equivalent to a Loss Mitigation Application, which basically means that you’re working with the bank in order to catch your mortgage up and continue to make payments from that point on.
This form will buy you some time so that you can go through options on how to get your mortgage current. I would recommend you watch our video on the options you have to catch your mortgage payments up if you’re behind. That will give you a step by step guide on how to approach this type of problem, similar to a checklist.
All of your options will be on that list, from a loan modification all the way to selling the property. No matter what your situation is, it is always good to be armed with information. If you are looking for some support through this situation or you just want to talk, please reach out to me below or at 267-984-4765 and my team and I would be more than happy to talk with you and help you through any situation you’re in.
I look forward to hearing from you!