If you miss a mortgage payment, you may fear that your home will be taken away overnight. However, this is not the case in most scenarios. In fact, the state of New York has the longest and most structured foreclosure processes in the country since it is a strict judicial foreclosure state. Lenders have to go through a vigorous process with the court system before taking your home. Here’s a breakdown of what generally happens after you miss a mortgage payment.
The First Missed Payment
Most mortgage agreements include a grace period of around 15 days with no consequences. However, once the 15 days are up and no payment is received, a late fee is typically added to your balance (usually 4% ot 5% of of the overdue principal and interest amount). The lender may also begin to contact you, reminding you of the missed payment.
30 Days Late
If the mortgage payment is not met after 30 days, your credit score may take a hit. The lender will likely report your missed payment to credit bureaus. You may also receive a written, formal notice.
This stage is crucial. Taking action during this time will increase your available options.
The 90-Day Pre-Foreclosure Notice
In New York State, the law requires lenders to send a formal 90-day pre-foreclosure notice before filing a foreclosure lawsuit. This 90-day window provides you with time to explore solutions such as repayment plans and loan modifications. If the missed mortgage payment is not made within these 90 days, the lender can initiate the foreclosure process.
Help is Available
If you are struggling to meet your mortgage payments and are moving closer toward the foreclosure process, our defense lawyers at Todd Cushner & Associates are here to help. Contact us today at (914) 600-5502 for a free consultation.
