A delinquent mortgage is when a borrower who has received a mortgage loan, fails to make repayments as agreed. This is when the payment is late or not made on the scheduled due date as agreed with one or more required payments. In certain cases of an overtly delinquent mortgage, lenders can begin foreclosure proceedings. This can cause the property in question to transfer ownership to the lender.
Borrowers who are delinquent with their mortgage payments can face additional charges, late fees, and fines, depending on the mortgage agreement. It may also negatively affect the borrower’s credit score and hurt their acceptance rates when applying for loans in the future.
Many lenders will work with delinquent mortgage borrowers and offer different financial solutions to help them avoid defaulting on the loan. In certain cases, home equity loans or home equity lines of credit can be offered to avoid default. In other cases sometimes a forbearance agreement may be offered if the borrower’s financial struggle is temporary. Forbearance agreements allow borrowers to pause monthly mortgage payments for a time, or reduce their scope. Another option available is a repayment plan offered by many lenders.
Should a borrower encounter financial difficulties, it would be in their favor to discuss their options with the lender. This should be done before mortgage payments become delinquent.
Many borrowers offer a 60-day extension for delinquent borrowers. In cases where mortgage repayments have not been paid for a period of 180 days since the start of delinquency, default action may be taken.