Monthly expenses can easily pile up. What’s worse is if unforeseen circumstances tack onto the monthly total you owe. With this, you may be worried that you are unable to make your monthly mortgage payment, and you may be unsure of the consequences of doing so. Continue reading to learn what happens if you miss a mortgage payment and how an experienced Orange County foreclosure lawyer at The Law Offices of Michael D. Pinsky, P.C., can help you avoid this.
What will happen if I miss a mortgage payment?
Contrary to what you may assume, you will not lose your home to foreclosure by missing a single mortgage payment. This is because banks are not in the business of real estate. Rather, they are in the business of mediating between borrowers and lenders. That is, they will rather help you work toward creating an alternative payment plan that will help you better meet your monthly mortgage payments.
As soon as you realize that you may miss your mortgage payment, you must contact your bank and lender immediately. Here, you must explain your unforeseen circumstances, assure them that this is an isolated occurrence, and request that they develop an alternative payment plan. If you do not take this initiative, and if you repeatedly miss your monthly payments, then the bank will be left with no choice but to expedite the foreclosure process on your home. With this, your home can be auctioned off within the same year.
What should I do to avoid missing any more mortgage payments?
To avoid missing any more mortgage payments, you may find it in your best interest to file for bankruptcy. And regardless of which type of bankruptcy you file for, you may be eligible for the Loss Mitigation Program. A benefit to this is that the bank cannot proceed with the foreclosure or auction of your home while you are working through this program.
Then, you may want to apply for a loan modification. With this, you and your attorney will work with the bank to adjust your mortgage payment plan in a way that better aligns with your current financial situation. For example, you may be able to change your mortgage payment plan so that you make smaller payments per month but for an extended period of time.
When applying for a loan modification, you must have the proper documents to support your request for an alternative payment plan. If not, the bank may view your request as impractical and deny it. The following are pieces of proper documents:
- Financial statements.
- Profit & loss statements.
- Personal bank statements.
- Business bank statements.
- Personal tax returns.
- Business tax returns.
- Paystubs of each wage earner in your home.
- Present utility bills.
- A hardship letter.
Do not proceed any further without the assistance of a skilled Newburgh bankruptcy lawyer. Contact us today.