Creditors expect not only to be paid, but to be paid on time. Mortgage companies are no different. When it comes to your mortgage, you can’t be a day late and a dollar short. When you’re dealing with your home, the stakes are too high to risk otherwise.
Credit bureau reporting
Mortgage companies report religiously to the credit bureaus. Strings of months with late or missed mortgage payments will badly damage your credit. If your credit score is important to you, prioritize your mortgage over any other bills. A day late and a dollar short just doesn’t work with either your mortgage company or the credit bureaus.
Loan reinstatement means catching up on missed mortgage payments, along with all associated late fees and charges, with a single lump-sum payment. To reinstate, request from your lender a formal, written reinstatement quote with a “good through” date (or deadline). If you pay late or underpay, your loan will not be fully reinstated and your lender may reject your payment and commence foreclosure proceedings.
If your lender offers you a mortgage modification, usually there will be a trial period of three to twelve months. Once you have made all of the trial payments, then your lender will permanently modify your mortgage. There are lots of reasons why lenders deny modifications, but the most common reason is that the borrower is a day late and a dollar short. If you underpay the trial payment, your lender will void the trial modification. Worse, if you miss a trial payment or make the trial payment late, your lender will simply deny the modification and restart the foreclosure process.
Don’t be a day late and a dollar short
Actually, don’t be a day late OR a dollar short. Either is sufficient to derail your mortgage status and put you at risk of foreclosure. If you run into mortgage trouble, contact a foreclosure defense attorney early in the process to determine your options.