While you likely never thought it would happen to you, anyone can find themselves in a pickle when it comes to making a mortgage payment on time (or at all). You may even have a grace period from your lender, but don’t get in the bad habit of relying on those. At the very least, you should review the terms of your loan referring to penalties for missed payments so you can prepare for any consequences.
If you know that you aren’t going to be able to make your next payment on your Hawaii house, get proactive and contact your lender ASAP. Explain your hardship and find out how they can help you through a rough period with any repayment programs and other potential options for resolution. We will discuss what you can expect if you’re behind on your mortgage in Hawaii.
Initial Missed Payment
Passing the first late payment threshold, typically at the 15 day mark, means you can expect to incur late fees if you’re behind on your mortgage in Hawaii. These late fees are commonly 4 or 5 percent of the mortgage payment – no small fee for a Hawaii property (median single-family home prices on Oahu today are over $1,000,000).
If you pass the 30-day mark, your delinquent payment may appear on your credit report and drop your credit score — if you plan on selling your current house and buying another one, you’ll want to protect this score as much as you can. Many variables determine how much of a drop your score will suffer; needless to say, the better your score to start with, the more you have to lose if it goes south. If you find yourself in this situation and haven’t yet contacted your lender or association, now’s the time. Don’t put your head in the sand, as tempting as it may be to turn away from the world.
36 Days Late
After 36 days without a payment, your loan servicer will likely reach out to you and attempt to discuss the situation causing you to be behind on your mortgage in Hawaii. And should you have reached the point of missing your first month and surpassed 45 days without making a payment, then you can expect your lender to assign someone to your case to explain the options available to you. These may be selling your Hawaii house outright, a loan modification plan such as a forbearance, or some other creative option.
Options
You can expect your servicer to have several options to help you if you’re behind on your mortgage in Hawaii. But, first, you have to be willing to work with them — they won’t just hand you a new shiny deal on a silver platter. You’ll have to show intent and you’ll have to apply – be prepared for a lengthy application. Within a month, your service is generally required to provide you with any feasible options for which you may qualify.
120 Days
If you haven’t yet sent in a complete loan modification application, you can expect your bank or loan servicer to begin the foreclosure proceedings if you’re behind on your mortgage in Hawaii. However, if you submit a completed application 37 days before a scheduled foreclosure sale, more often than not, your servicer must check into your eligibility for a loan workout; that doesn’t mean you won’t get foreclosed on, but you’ll get another set of eyes on your situation.
Keep in mind that Hawaii largely changed from a non-judicial foreclosure state to judicial foreclosures to avoid participating in the state’s Mortgage Foreclosure Dispute Resolution program. This means you can expect a complaint and summons and, if you don’t successfully defend yourself or even show up to court, a default judgment followed by the foreclosure itself.
More importantly, in Hawaii you could be on the hook for a deficiency judgment from your lender (the difference between the total debt owed on the mortgage and what it sells for at auction). Please don’t let this happen – get proactive and talk to us first.
Loan Modification
Suppose you are behind on your mortgage in Hawaii, and you submitted your loan workout application 37 days before the foreclosure sale. In that case, one of three scenarios must have occurred before your servicer could start or continue with the foreclosure process. The first occurrence would be the bank deciding that you don’t qualify for a loan modification – this happens to many people; after all, the conditions that led to your original mortgage trouble might still exist even with a modified loan. The bank will want to make sure you can still make the new payments before they put you on a new program and take their foot off the foreclosure gas pedal.
Secondly, if you should reject the mortgage servicers offer for a loan modification yourself. And the last condition, if you agreed to a modification but didn’t keep up with your payments or any other responsibilities during the trial period, they may proceed with the foreclosure process picking up where they left off (they don’t have to start from scratch).
Review
If you submitted your loan modification application 90 days before the foreclosure sale, you can generally seek a review of your bank’s decision, and they must assign someone uninvolved in the initial process.
Whatever you do, the big lesson is not to delay; it is much easier to sell your home before foreclosure proceedings start. If you haven’t contacted your lender because you believe you have no way out or are just embarrassed (it happens a lot), consider a direct sale of your home to a professional buyer like those here at Oahu Home Buyers. We understand all too well that situations in life can quickly escalate beyond our control, and we want to help you make the most money you can for your home.
At Oahu Home Buyers, we stop and listen and are happy to answer any questions you have with no obligation. If your home is in less than perfect condition, your worries are over because most homes qualify for Oahu Home Buyers to buy them directly in as-is condition, even if they can’t be saved. With the backing of pure cash, the closing can be fast, and you’ll receive an offer that you agree is fair because at Oahu Home Buyers, we want you to feel good about the deal long after the closing. Contact Oahu Home Buyers at (808) 333-3677.
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