If you have missed mortgage payments, you may wonder: Will partial payments delay foreclosure? In most cases, unfortunately, the answer is No.
If your mortgage company actually accepts your payment, they will not apply it to your most recent bill. To stop or delay a foreclosure, you must get the bank to agree (in writing) to forbearance. This is not easy.
The fewer missed payments you have, the more options will be available to you. The larger the amount that you owe, the less the mortgage company will be willing to work with you.
If the Bank Accepts Your Partial Payment
Late payments not only lead to foreclosure. They also come with heavy fees and penalties. On some loans, mortgage banks make more money on fees and penalties than on actual mortgage payments. On other loans, the bank makes more by foreclosing than from contractually-due payment.
If your mortgage lender accepts a partial payment for you, the partial payment will not delay foreclosure. Instead, your lender will apply any payment you make to the oldest outstanding payment due, including fees. In the meantime, continuing monthly payments due continue to accrue.
If you are seeking to stop or delay foreclosure, partial payments will only work if you have a forbearance agreement with your lender. And mortgage lenders only very rarely grant forbearance agreements in exchange for partial payments.
If the Bank Rejects Your Partial Payment
After three missed mortgage payments, most banks reject partial payments. Instead, your bank will insist upon payment in full of the entire amount due, plus penalties, fees and interest. If you cannot make this payment amount, then the mortgage company moves your account to the foreclosure department.
Once you are in pre-foreclosure, you must make tough decisions in a short period of time. You should contact a local foreclosure defense attorney immediately to assess your options.
Will Partial Payments Delay Foreclosure?
Most mortgage loans allow lenders to decline partial payments from delinquent borrowers. Your lender will send you a letter explaining why your payment was declined. You should contact an attorney to review this letter and to help you assess your options. Unless you have a forbearance agreement from your lender, partial payments will not delay foreclosure.