Have you ever thought “What are my possibilities if I can’t pay my mortgage?” If this thought has ever crossed your mind, don’t stress because, with the support of our bankruptcy lawyers, you can get the help you need if you’re in this situation.
This is what happened with one of our clients who had stopped paying their mortgage for more than seven years.
In this case, we were able to save our client’s property from being seized because we managed to get the mortgage payment modified based on the current value of the property with a zero interest rate.
What to do if I can’t pay my mortgage?
If you are looking for solutions for paying off mortgage, whether it is the full payment or one of the mortgage payments, you should contact the mortgage servicer as soon as possible to avoid falling into foreclosure.
Another possibility as an answer to what to do if you can’t pay your mortgage is to contact a private housing counseling agency approved by the US Department of Housing and Urban Development (HUD) or a specialized attorney.
What can these agencies help you with? HUD agencies can help you:
- Analyze your current situation to see if you qualify for any programs where you can get additional help.
- Help you understand the loss mitigation options your mortgage servicer offers and choose the one that best suits you.
- Guide you through the mortgage program process and any paperwork you may need.
- Help you build a budget that allows you to manage your debts, payments, and financial issues.
Please note that if you are already facing imminent foreclosure or have been served with legal papers, you should consult an attorney.
What options do you have if you have defaulted on your mortgage?
Some of the options your mortgage servicer may offer you include:
- Refinance the home
- Modify the loan
- Make a payment plan
- Get a deferment
- Sell the home
- Return the home
What happens if I default on my mortgage?
If you don’t pay your mortgage in California, the foreclosure process can begin and here’s what could happen:
- Notice of Default: After 120 days of nonpayment, the lender can issue a Notice of Default (NOD). This notice is recorded in the county where the property is located and sent to the owner.
- Recovery Period: You have 90 days from the date of the NOD to catch up on late payments and avoid foreclosure.
- Notice of Sale: If you don’t catch up in those 90 days, the lender can issue a Notice of Trustee Sale (NTS), which sets the date for the auction of the property.
- Auction: The property is auctioned off to the highest bidder. If there are no buyers, the lender takes possession of the property.
- Eviction: If the property is sold or the lender takes possession, the new owner can start the eviction process if you don’t leave the property voluntarily.
It’s important to act quickly if you find yourself in this situation. You may consider talking to your lender to explore options such as loan modification or short sale.
How many mortgage payments can you miss?
Missed mortgage payment? Late mortgage payment? In California, the number of mortgage payments you can miss before facing foreclosure depends on several factors, including the length of the loan and the percentage of unpaid principal.
- First half of the loan: You can miss up to 12 monthly payments or the equivalent of 3% of the main loan.
- Second half of the loan: You can miss up to 15 monthly payments or the equivalent of 7% of the main loan.
It is important to note that, regardless of these limits, lenders typically begin the foreclosure process after 120 days of non-payment.
Consult with an attorney and avoid losing your property
S&B Legal offers free consultations on situations related to your mortgage payment. Don’t let it get too late, contact us, we are ready to help you find a solution like we did with this client.
