The number of emails I’ve received from homeowners in distress has increased in the last few weeks. It’s almost as though the Christmas foreclosure freeze has thawed, and lenders are trying to fight through the backload of homeowners who aren’t paying their mortgages.
Maybe this is what’s happening. I don’t know.
I do know that lenders are on the lookout for borrowers who miss their first payment. It’s well-known in the lending industry that the vast majority of homeowners who miss a single payment, and are late just by 30 days, will figure out a way to catch up on their payments.
But what happens when the owners miss a payment and the property is rented? Well, then the tenants might find out the owner is delinquent in a most unpleasant way: A knock at the door.
I received the following email this morning: “I received this notice tacked to my front door: ‘At the request of your lender, an independent field inspector called on you today. Please call our homeowners assistance dept. at [phone number deleted].’ What does this mean? Will I lose my home?”
I wrote back and asked if my correspondent had missed a payment. Lenders are employing independent field inspectors to visit properties whose owners have gone delinquent on their mortgage.
In addition to checking to be sure the property is occupied and in good shape, these inspectors also might arrange to have the property mowed or negotiate with the city or county over various issues relating to properties that have either been abandoned or foreclosed on by the lender.
My correspondent told me that his parents actually own the house and are paying for him and his wife to live there.
“I told my parents last night about the note that got put on our door, and they said that they were behind on the mortgage by about one month. We are going to help them out, but we are in a bit of a financial bind ourselves. To say that my wife and I are a little nervous is an understatement,” he wrote.
I asked my correspondent if he felt his parents were at risk of losing the house. He said that he wasn’t sure, but doesn’t think his parents would tell them so that they wouldn’t panic.
But of course, he and his wife are already panicked.
What’s needed here is a little open and honest dialogue between parents and children. If the parents believe they’re protecting their children from being hurt by not letting them know they’re in trouble financially, then it will be a real shock if they ultimately default on the mortgage and lose the property and the kids get kicked out of the home.
While the son is having trouble with his finances, trying to get his parents caught up on the late payment is of supreme importance – not only will it secure the property, but it will also keep his family calm.
Getting a notice like this one tacked to your door doesn’t mean the lender is about to start foreclosure proceedings. Around 70 percent of those who are 30-days late on their mortgage “cure” themselves. Lenders just want you to pick up the phone and talk to them about what’s going on. It’s important that you start a dialogue and not rip the paper to shreds, hoping no one will notice.
If you can’t make your mortgage payments, let someone know. Call your lender or call the Hope for Homeowners hotline: (888) 995-HOPE.