Default

Default: The failure to pay a mortgage payment.

Default: The failure of the homeowner to live up to the terms of a mortgage contract. Generally, default indicates the inability of the homeowner to pay the interest or principal on a mortgage debt when it is due.

Default: Managing Missed Mortgage Payments

A mortgage default means the homeowner has violated the terms of their mortgage contract. The most common default is failure to make a monthly payment. However, other violations can be categorized as a default as well, including failing to have adequate property insurance, pay property taxes, or maintain the property in a reasonable state of repair. A default can also be the result of taking a second mortgage on the property, or selling the property without the bank’s consent.

Following a default, the bank will issue a reminder notice or demand letter requesting payment of the outstanding balance. If the failure to pay persists, the bank can take possession and sell the property under the terms of the mortgage agreement or by foreclosure.

For homeowners faced with a default notice, the answer may be to pay the outstanding balance and reinstate the mortgage or sell the home at a profit and reimburse the bank for the missed payments.

According to the Federal Trade Commission, “If you are struggling to make your mortgage payments or you’re in default, contact your mortgage servicer right away. Many people find it embarrassing to talk with their servicer about payment problems, or they’re hopeful that their financial situation will improve and they’ll be able to catch up on payments. Keeping the lines of communication open is critical to resolving issues with your loan. Options to help you bring your mortgage loan current and save your home from foreclosure include loan modifications, repayment plans, or a temporary reduction or suspension of payments. If you’re not eligible for any of these options, your servicer may be able to help you find a solution other than foreclosure, like a short sale or a voluntary transfer of the property through a deed in lieu of foreclosure.”

Default

Default: The failure to pay a mortgage payment.

Default: The failure of the homeowner to live up to the terms of a mortgage contract. Generally, default indicates the inability of the homeowner to pay the interest or principal on a mortgage debt when it is due.

Default: Managing Missed Mortgage Payments

A mortgage default means the homeowner has violated the terms of their mortgage contract. The most common default is failure to make a monthly payment. However, other violations can be categorized as a default as well, including failing to have adequate property insurance, pay property taxes, or maintain the property in a reasonable state of repair. A default can also be the result of taking a second mortgage on the property, or selling the property without the bank’s consent.

Following a default, the bank will issue a reminder notice or demand letter requesting payment of the outstanding balance. If the failure to pay persists, the bank can take possession and sell the property under the terms of the mortgage agreement or by foreclosure.

For homeowners faced with a default notice, the answer may be to pay the outstanding balance and reinstate the mortgage or sell the home at a profit and reimburse the bank for the missed payments.

According to the Federal Trade Commission, “If you are struggling to make your mortgage payments or you’re in default, contact your mortgage servicer right away. Many people find it embarrassing to talk with their servicer about payment problems, or they’re hopeful that their financial situation will improve and they’ll be able to catch up on payments. Keeping the lines of communication open is critical to resolving issues with your loan. Options to help you bring your mortgage loan current and save your home from foreclosure include loan modifications, repayment plans, or a temporary reduction or suspension of payments. If you’re not eligible for any of these options, your servicer may be able to help you find a solution other than foreclosure, like a short sale or a voluntary transfer of the property through a deed in lieu of foreclosure.”

Scroll to top