What You Can Expect if You Miss Payments
Mortgage lenders and banks use computers to track the status of every loan payment. If you fall behind on your mortgage, you can expect a process similar to the one described below. Act early. Don’t wait!
1st Month Missed Payment: The first month your payment is missed, your mortgage company will probably contact you by mail and/or phone to inform you of your delinquent (overdue) status.
2nd Month Missed Payment: The mortgage company may begin calling you to discuss why you have not made payment. Important: Do not avoid their phone calls. Try to stay calm on the phone and explain to them your situation and how you are trying to resolve it. You still may be able to make one payment at this time to prevent yourself from falling three months behind.
3rd Month Missed Payment: At this point you are likely to receive a letter from the mortgage company stating the amount you are delinquent, and that you have 30 days to bring it current. This is called your “Demand Letter” or “Notice to Accelerate.” If you do not pay the specified amount or make some form of arrangements by the date given, the lender is allowed to refer you to foreclosure or accelerate your mortgage. The lender won’t usually accept less than the total amount due at this time, unless you’ve made other specific arrangements for payment.
4th Month Missed Payment: Now you are nearing the end of the time allowed in your Demand or Notice to Accelerate letter. If this time period expires and you have not paid the full amount or worked out arrangements, you will be referred to their attorneys. At this time all attorney fees are added to the amount you owe. The attorney then schedules a Sheriff Sale, which is the actual date of foreclosure. You will be notified of this date by mail, along with a notice taped to your door. Note: This is not a move-out date! You still have time to work with your lender to avoid foreclosure. Don’t wait!
Sheriff Sale Date: This will be scheduled for approximately 4-6 weeks after the attorney receives your file. You have up until this date to work out arrangements with the mortgage company or to pay the total amount owed (often called the “Reinstatement Amount”).
After the Sheriff Sale: If nothing is done to resolve the situation, you enter your “Redemption Period.” State Law in Michigan requires that this period be no less than 30 days and no more than one year. Most mortgages allow six months. You will be notified of your time frame on the same notice that states your Sheriff Sale date. During this time you may still reside in the house. You may also sell or repurchase the home for the full amount it sold for at the Sheriff Sale.
Key Actions for You: Stay in contact with your mortgage company and seek assistance as early as possible. Remember all of these dates are estimated, and may vary according to your individual mortgage contract. Please note: This timeline does NOT apply for mobile homes and land contract-type mortgages.