Although the housing market has stabilized and the home prices have increased you might still find yourself having trouble paying your mortgage. If you fail to make your monthly mortgage payments your lender may take action to repossess your home.
Not paying your mortgage can have a major impact on your credit score. As soon as you miss your first payment, the mortgage lender will hit you with a 30-day late. Even though you are delinquent on your mortgage payments don’t lose hope, as there are ways out of foreclosure.
Educating yourself and familiarizing yourself with the foreclosure process and what usually leads to it is the key. It is important to take action rather than sit back. Ignoring your situation won’t make it go away.
Florida Mortgage Loans
When you take out a loan to buy a house in Florida, you will be asked to sign a promissory note and a mortgage. A promissory note, also known as an IOU, is a legal lending document that says the borrower promises to repay to the lender a certain amount of money in a certain time frame. The mortgage provides security for the loan that is indicated in the promissory note.
What Happens When You Miss a Payment
Mortgage loans usually include a grace period of ten or fifteen days. After this period the mortgage lender will assess a late fee. The late fee is typically 5% of the overdue payment including principal and interest according to the terms of the note.
While your score won’t be affected if your payment is under 30 days late, any missed payment after 30 days is disastrous. Your mortgage lender will report it to the three major credit bureaus and they will lower your credit score
What Happens When You Fall Behind in a Few Payments
Missing mortgage payments can cost you your property; with each missed payment, you’ll be getting closer to foreclosure.
If you miss two mortgage payments in a row, your loan will be considered to be in default. If you fail to pay your mortgage for 90 days, the lending institution will send you a demand letter. A demand letter informs you of how much is outstanding on the mortgage, what the daily rate of interest is, what the legal fees are up to date and that you have 30 days to bring your mortgage current. If you don’t pay the specified amount or reach an arrangement with your mortgage lender by the deadline, then the next step is for the lender to start formal foreclosure proceedings.
Notice of Default
The foreclosure process officially starts when the mortgage lender records a Notice of Default (NOD) indicating that the homeowner is behind in payments and the property could be seized. Usually, most mortgage lenders will wait for 60 days from the date of the unpaid before filing. During this time you can certainly work with them to make up the payments or find another resolution.
The foreclosure notice of default has to be sent to anyone who has an interest in the property (any other loans, lenders, or even contractors who are owed money for work done to a property will get a copy).
In Florida, the foreclosing party has to file a lawsuit in court to start the foreclosure. Furthermore, the foreclosing party has to give notice of the lawsuit by serving the borrower with a summons and complaint. The borrower will typically have 20 days to respond to the lawsuit against them.
The foreclosure notice of default has to be published in a newspaper once a week for two consecutive weeks, with the second publication at least five days before the sale and physically posted in a prominent place on the property itself.
Once the Notice of Default is filed, your possibilities as a homeowner are limited, therefore you should contact your lender before they have the chance to fill in the notice.
You should try and contact the loss mitigation department of your mortgage provider. Loss mitigation is another term used for “foreclosure prevention.” The sooner you ask for loss mitigation, the better chances you have to save your home. If your case is referred to a foreclosure attorney the amount you owe can significantly increase in a very short period of time, as you will also face all the expenses associated with the delinquency.
You can sell your home up until it is sold at auction or the bank takes possession of your house. One way to avoid foreclosure is to sell your property to a home cash buyer such as Gardenia Homes. If you are behind in payments or have already been served a Notice of Default, we can help. When it comes to foreclosure scenarios, we bend over backward to make the experience stress-free. We try to customize the selling process and adjust the timeframe to fit the outcome you have in mind.
If you received a notice if default it’s not too late to salvage your credit simply give us a call at 407-490-3564 or fill out our form and will make you a fair cash offer within 24hrs.