Can a Mortgage Company Foreclose for Delinquent Payments?
- A bank or mortgage company has the right to begin the foreclosure process after a sigle missed payment. However, most don't start the process that soon, so if you miss or are late on a single payment, don't automatically assume your house has gone into foreclosure. In fact, many companies wait until a payment is at least 90 days late before proceeding. You should, however, contact the lender as soon as you know you missed or will miss a payment. This will give the lender time to work out a payment plan or arrangement with you if it so desires.
- Although most homes go into foreclosure because the owners couldn't make the payments, there are other reasons why a bank or mortgage company may revoke a loan. According to Bank of America, these reasons include disobeying the terms of your loan in any other way, such as selling your home without approval from the mortgage company.
- Most banks and mortgage companies are willing to work with you to help you avoid foreclosure. If you get a notice of foreclosure, you should call the bank right away to see whether there are any programs that can help you keep your home. Some banks will allow you to refinance, and the Department of Housing and Urban Development offers the HOPE for homeowners program, which offers Federal Housing Administration insured loans for people who are at risk of foreclosure. There are a number of other federal and bank-specific programs designed to help make house payments more affordable so people can stay in their homes.
- The foreclosure process begins with a bank's notice of a foreclosure and often ends with a public auction of the home and the eviction of the family that was not able to make the payments. However, the foreclosure process can be stalled or stopped by bankruptcy as well as by the alternatives listed above. The exact process for you will depend on whether you live in a judicial or non-judicial state, as in judicial states foreclosures are overseen by courts.