How Many Payment Behind Must I be Before the Mortgage Company Starts the Foreclosure Process?

We often receive calls from potential clients who want to know how far behind they must be before their mortgage company will start a foreclosure.  One month? Two months?  Five months?

The answer to this question is “it depends.”  Technically, your mortgage company could start foreclosure the day after your “late payment date,” which is usually 10 or 15 days after the on-time due date.  As a practical matter, however, most mortgage companies will not start the foreclosure process until you are at least three months past due.

The mortgage foreclosure process is expensive for your mortgage company to pursue and you can be assured that they would much prefer to see you current.  As you may know, mortgage loans are bought and sold as commodities, and a “performing” loan carries much more value than one that is delinquent.

Generally, when your payment is not received by the “late payment date,” you will receive a call from a mortgage company customer service representative.  This person will remind you that your payment has not been received and ask you when you plan to pay.

As a rule you should not ignore these calls.  As noted above, most lenders do not want your loan to go into foreclosure and their customer service people often have the power to work out payment arrangements, especially if your delinquency was caused by something unexpected like a sudden job loss or family emergency.

On the other hand, you should be careful when talking to anyone who works for your lender, and you should assume that your phone call is being recorded.  Never make promises to pay that you cannot fulfil.  If the customer service representative should become rude and intimidating, do not be afraid to ask to speak to a supervisor or to request another agent.

Under no circumstances should you ever authorize your mortgage company to deduct money directly from your checking or bank account.  If this issue ever comes up, you should tell the rep that you need to speak with your lawyer, hang up and call our office immediately.

Do not forget that customer service representatives working for mortgage lenders are collection agents who have been trained in the psychology of collection.  They will be following a script that has been written to intentionally keep you off balance and to undermine your self confidence.  You must keep in mind that your mortgage delinquency is a business problem and not a moral failing.  If the customer service representative starts talking about guilt – such has how your family would react if you lost your house to foreclosure, red flags should go up in your mind that the collection agent is trying to manipulate you.

If you ever find yourself becoming uncomfortable with conversations you are having with a mortgage company customer service representative, you should feel free to call Clark & Washington at 770-488-9300 and speak with someone who has your interests in mind and who can advise you about how to handle mortgage company collection agents.