Can a late mortgage payment force you into forclosure?

Many of you are aware I work in the Bank REO, Short Sale and Foreclosure markets. What stories I have been hearing lately (I will go into later) is of customers as little as 1 day late on their mortgage payment being forced into foreclosure because the mortgage holder no longer will accept their payments.

This is hard to comprehend. Why would the mortgage holder risk the costs incured with Real Estate Attorneys, Realtors, and the length of time to regain the borrowed funds through foreclosure if at all; rather than just accept the late payment(s) with a late payment fee and continue to allow the homeowner to honor the repayment contract?

We here alot of talk on TV and Radio about the homeowners that bought to much home, with payments that were to high, borrowed way to much and the Realtors and Mortgage Lenders that allowed them to do this so it is all their fault. But what about the homeowner that didn't? What about the homeowner that due to the downturn in the economy was laid off and got behind on the mortgage payment but was then able to catch up? Shouldn't we as a country say, "Gee sorry Joe Homeowner that is unfortunate what happened to you, glad to see that you were able to get back on track." Instead of "To bad for you, oh by the way, we have repossessed your car, sold your home at auction and with your now bad credit, good luck finding an apartment to rent."

Just in the last two weeks I have heard three stories from Veterans, excuse me let me rephrase that Disabled Veterans that are in the process of being foreclosed on or have been foreclosed on. Good honorable people that want nothing more than to pay their mortgage and continue living in the homes they purchased but the companies that hold the mortgage have refused the payment. One homeowner was one day late with the payment and they refused to accept it. The process continued, they put their faith in an attorney and a supposed self proclaimed knowledgable Short Sale Realtor that did not inform them of the process along the way. They were summoned by the foreclosure attorney to appear in court and waited the whole day for their case to be called. They were told by the judge their case had been settled earlier back in chambers and the home had already been foreclosed.

I also had a customer earlier this year that had this happen also, we were able to negotiate a short sale and close on the property, however the late payments, interest, and penalties took the original loan of $94,000 up to $112,000 and we sold the property leaving a short of $5,700 the customer could not pay in closing costs. The Mortgage Lender had the customer take out $10,000 promissary note to pay the short of $5,700 and close the deal. So in the end the mortgage lender recovered $122,000 in six months on a $94,000 loan, or a profit of $28,000 because they refused to accept the customers late payments.

I am seeking help from my readers, I can not figure this out? What is the financial incentive not to accept the payments from these homeowners if short sale and the above example does not happen? If the bank or mortgage company is not profiting from the current policy of refusing payments is our tarp money being used to bailout the banks and provide the incentive to force customers into foreclosure? Are Mortgage Lenders actually double-dipping putting a lean on people for loan short falls and getting money from the tarp to cover the losses? Why are customers being charged late payment and penalties for late payment on month, two three and four when the lender will not accept the payment?

There also must be other stories just like these, how many people has this actually happened too? Why is no one in the main stream press talking about these cases? Who should these people contact that might be able to help them with their situation?

I have reached a dead end at the moment and might be talking on deaf ears, but I do have to admit, I make sure my own mortgage payment arrives a few days early now.

Real Estate Statistics

We now have the lowest months supply of homes 7.6 months supply than we've had since July of 2007. Yes, July of 2007. We have been averaging about 9 months supply so far this year.

Average days on market dropped 7.7% from January to April. We are now at 88 days. But not the greatest comfort when it is taking your home to much time to sell. Abaris Team William Staab and Jordan Knecht's average: 63 days.

More homes closed last month (588) since October of 2008. That number was slightly higher than March's number.

More homes went under contract in April (873) since May of 2008. In fact, April beat March by 17.8%. That means more homes went under contract in April than in the "busy" months of last summer 2008.

Between the $8,000 tax credit: http://www.federalhousingtaxcredit.com/2009/index.html
and programs such as the New Mexico Mortage Finance Authority:


This may be a good time to buy a home, contact us today to see if homebuying is an option for you.

As we move into the busy home buying season here in Albuquerque, although the statistics are showing signs of positive economic life, they haven't really been on life support here in Albuquerque as some other areas of the country, and even in the hardest hit states, the problem has really been in only 35 counties in all of those states.

I do not like to post just raw statistics here on the blog since the information is so readily available on every Real Estate website, ad infinitum, but try to provide you with information about the exceptional services offered on BuyaHouseNewMexico.com that will help you make a wise choice in the home you sell or purchase and insure that you have Realtors and Real Estate service providers that will provide the highest level of satisfaction and customer service.


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