Falling Behind on My Mortgage Payments

Due to financial circumstances not of your own making, generally unexpected and basically not welcome, you may fall behind on your mortgage payments. Once you fall behind, the mortgage company has the right to proceed with foreclosure. They do this by means of filing a lawsuit in Circuit Court. The lawsuit seeks to foreclose on your real estate by obtaining both a judgment against you and your real estate.

What are the judgments?

The judgment against you personally, called an “in personam judgment”, seeks to recover from you the total amount due. It also aims to recover the mortgage company’s attorney’s fees and costs spent in proceeding with the foreclosure suit. The judgment against your real estate is called an “in rem judgment”. It seeks a court order allowing the sale of your real estate at a public auction. This auction is often referred to as a Commissioner’s Sale or as being sold at the courthouse steps or door.

Once you fall behind on your mortgage payments, it is difficult to bring your mortgage up to date. To do this, routinely mortgage companies require you to pay all of your past due payments due in one lump sum. They also require you to pay any late fees and possibly any advances made by the mortgage company. Advances could be for insurance, taxes and the like. This process of bringing your mortgage back to an up-to-date status is referred to as “reinstating” your mortgage loan. Generally, the mortgage company will not accept partial payments on the amount you are behind in your payments. Routinely, mortgage companies require that homeowners bring their mortgage completely current to date.

What happens if I fall too behind?

If you do not bring your mortgage back up to date, the mortgage company will typically file a foreclosure action in Circuit Court. This may happen the first time that your mortgage payment is past due. More commonly, the mortgage company does not file a foreclosure lawsuit until you are a couple of months behind. You will know that a foreclosure has been filed in court when you are formally served with a foreclosure complaint. The mortgage company may serve you with these papers by sending them to you by certified mail. They may also have the papers hand-delivered to you by a Sheriff or Special Bailiff. After you are served with the initial foreclosure complaint, you will receive the rest of the documents by way of regular U.S. mail.

Once the foreclosure lawsuit is filed, it continues to move through the court system. It will do so until the mortgage company receives an order from the court that the real estate can be sold at auction. The foreclosure action will not stop unless it is either stopped by the mortgage company or it is stopped by the homeowner filing bankruptcy in Federal District Court. Making additional payments along with your regular monthly mortgage payments or sending in a lump sum(s) less than the total amount required to reinstate the mortgage will not stop the foreclosure. You should not rely on the foreclosure stopping unless you have received a written confirmation.