What Happens if I Miss One Mortgage Payment?

What if I miss 2, 3 or more payments? When am I in danger of foreclosure?

Missing a mortgage payment isn’t going to happen if you’re faced with a car repair bill, or a new pair of glasses. Most money problems that a homeowner has to deal with can be absorbed without their train jumping the financial track. But when you’ve been hit with circumstances beyond your control – a divorce, the loss of a job, a medical catastrophe – this is when the most important financial obligation people have – their mortgage payment – may run aground.

We’ve encountered people who were panicked after missing one payment, sure that they would be foreclosed on immediately and they would have to be out of their home in 30 days. We’ve also encountered people that were surprised when they received their notice, thinking that they had many months before they were in danger of foreclosure.

There’s a lot of confusion about what kind of impact a missed mortgage payment has, and how long it takes before a home is actually considered to be “in foreclosure.” Every lending institution is different, and will handle the process of dealing with missed mortgage payments differently, but the timeline is pretty much the same across institutions.

Some banks are more vigorous and/or stern with how they deal with missed payments, and some are much more conciliatory and helpful. Some will start a vigorous campaign of calls and letters immediately, some won’t. In depends on the area you live in, the kind and size of the institution, who you are, what kind of property is mortgaged – there are numerous factors that influence the process and way you are approached about missing payments. But here’s the rundown:

I’ve missed one mortgage payment – what happens now?
You’ve missed one payment. Your payment is due on the 1st of every month, it’s now the 4th. What will happen? Well, if your payment is due on the 1st, there’s generally a grace period until the 15th, or 2 weeks after the due date. If you pass that date and pay somewhere between the 15th and the 30th or 31st, then a fee may be charged, and you are considered “delinquent.”

It’s likely you’ll get a notice soon after you haven’t paid for 2 weeks, maybe even a phone call. The important thing to know is that when you’re 30 days late with your mortgage payment – that’s when most lenders will report you to the credit bureaus, and that’s when your credit score will take a big hit. How much? A mortgage payment that’s 30 days late can lower your score by as much as 100 points.

What happens if I miss a mortgage payment for 2 months?
Things start getting serious after 30 days, but they’re will get even more serious after you’ve missed your first payment, and it hasn’t been paid by the middle of the month. Once you’ve passed 45 to 60 days late. At 45 to 60 days late you’ll get a demand or “breach” letter, known as a “notice to accelerate.” It will tell you you are in default on your loan, how much you are behind, and order you to pay within 30 days. This letter will also warn you that a foreclosure is looming in your future if you don’t pay. It is also at this point – 60 days (2 payments) – that your credit score will usually take another hit.

What happens if I miss a mortgage payment for 3 months – when am I in danger of foreclosure?
If you’ve gone past 60 days without making a mortgage payment, you will certainly be getting both letters as well as telephone calls telling you that your have defaulted on your mortgage payments, and that your home is in danger. At the 90 day mark – the process of foreclosure will formally begin, and your credit score will take another huge hit. This is when you will get the “Notice of Trustee Sale,” or the dreaded “notice of foreclosure” letter. When you’ve received this letter, you have 90 days until your home is sold. Once your home is sold, you are no longer the owner, and you must vacate the premises – leave your home.