What happens if I do not make my payment on the due date?
The loan servicer expects to receive your payment by the due date. If the servicer has not received your payment by that date, it is delinquent. Most loans have a Grace Period, which is the length of time between the due date and the date when late fees begin. The promissory note contains the due date.
What happens after that?
The Collections Department may start contacting you between the 16th and the 30th of the month if the payment is still due.
What is the Collections Department?
The Collections department is a division of loan servicer that is responsible for obtaining and applying payments due on mortgage loan. The Collections Department will contact you to collect past due payments. If the Collections Department has not been able to collect or make acceptable payment arrangements with you, your account may be referred to the LOSS MITIGATION DEPARTMENT/ Home Preservation/Or Work Out Department.
What is Loss Mitigation?
This is a division of the loan servicer that will work with you to establish an acceptable plan to get you back on track with your mortgage payments. You will begin to receive letters from your lender/servicer requesting that you call them. ALWAYS OPEN ANY LETTERS FROM YOUR LENDER/SERVICER. ALWAYS ANSWER and RETURN THEIR CALLS! This is the period where you may have other options available to you. The Servicer / Lender will make many attempts to contact you. CALL YOUR MORTGAGE COMPANY/SERVICER IF YOU KNOW YOU’LL BE LATE AND ALWAYS RETURN THEIR CALLS Arizona Foreclosure Prevention Task Force | www.azforeclosureprevention.org | Revised March 2, 2011 | Page 9 of 50
What if I am More than 30 Days Late?
Although you are late from 1st day after the due date, the COLLECTIONS, sometimes referred to as the LOAN SERVICING Department, of your mortgage company will start calling you between the 16th and the 30th of the month.
What is the Collections or Loan Servicing Department?
Collections is a loan servicing division of the mortgage company that accepts and applies your payment each month, tracks any late fees, monitors and when included in your payment, will pay the taxes and insurance when due. They will contact you when payments are missed. The “collections” or “loan servicing” department will start calling you to collect the past due payment.
What happens after I am 60 days late?
On the 61st day, the loan payment is 2 months past due, and if the Collections department has not been able to collect or make acceptable payment arrangements with you, your account will be turned over to the LOSS MITIGATION DEPARTMENT also know as HOME PRESERVATION or WORKOUT DEPARTMENT. Note: Servicers / Lenders may send someone out to physically inspect the property, to verify that the borrower has not abandoned the property (sometimes between 45-60 days). This is a normal process do not be alarmed.
What is Loss Mitigation?
This is a division of the mortgage company that will work with you on an acceptable plan to get you back on track with your mortgage payments. You will begin to receive letters requesting that you call them. This is the period where you will have more options available to you. They will make many attempts to contact you during this period.
What happens after I am 90 days late?
On the 91st day (in AZ), a third party TRUSTEE takes over your delinquent account. The Trustee will send a “Notice of Trustee Sale” stating that the property will be sold 90 days from the date the Notice was filed and recorded. There will be a notice published in the newspaper once a week for four weeks.
What is the process?
The Servicer/Lender will not send any more letters. It is now totally up to you to contact them directly as soon as possible, or through a HUD Approved Non-profit Housing Counseling Agency. Unless you act quickly, your house will be sold at auction on the date specified.
NOTE: The total number of days of delinquency (90, 120, 180) depends on your mortgage servicer. The trustee sends a “Notice of Trustee’s Sale,” setting a sale date no sooner than 91 days after the notice of trustee’s sale is recorded. The trustee must send by certified mail a copy of this notice within five days after recording. No further notice is required. However, in addition to mailing the Notice of Trustee’s Sale, the trustee must post the home with the Notice of Trustee’s Sale and post it at the superior court at least 20 days prior to sale (this could be right after the Notice of Trustee’s Sale is filed). The trustee must also publish the Notice of Trustee’s Sale in a newspaper for 4 consecutive weeks with the last date of publication not less than ten days prior to sal
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