Hi everyone,
Ive got a question regarding the process of surrendering a property due to loan default.
If you stop making payments on your home loan and the bank comes chasing after you what happens?
And then if you default on a loan all together what legal proceedure do you go through for the bank to take the property? do you get a second chance? does it go through the regular court system?
Im not defaulting on a loan… just interested in how the process works…
anyone know?
What the mind of man can conceive and believe, it can achieve.
Depending on the bank… something like this
5 days: Phone calls begin.
10 days: Phone calls continuing + reminder letter sent.
10-30 Days Past Due: Phone calls continue
30 DPD: Another letter if previous letter not responded to or an arrangement made via telephone.
60 DPD: Default fee ($30 I think)
60-90 DPD: Phone calls and letter continue
90 DPD: Demand notice issued with another $30 fee (Not too sure about this part) – Demand notice basically states that if no payments are made within 30 days, the mortgage will be passed to asset realisation
120 DPD: Account moves to loss mitigation (asset realisation people)
120-180 DPD: A couple of phone calls are made to advise that the house will be taken after a specified time if account not brought back up to date (Time allowed depends how far the payments are in arrears – possibly based on $$ value). You can still negotiate payment arrangements at this time, but you better have a pretty damn good offer.
180: Game Over. Sherriff contacted and eviction notice put on property. They might give 5 days or so for onwers to leave before the locks are changed.It goes pretty much along those lines I believe. Im sure it would vary from financial institution to financial institution though, so what i’ve said wont be 100% accurate.
Hope that helps (whatever the reason is that you wanted to know [
]).Take care,
Steve“Knowledge is Power”
You forgot the ‘credit rating destroyed and no lender willing to look at you again for less than about 3% above standard rates’ bit [
]… if anyone is ever in this situation, sell or move out and rent to keep from mortagee in possession phase.If you’re about to encounter problems eg due to an unexpected pregnancy, pending job loss etc it pays to contact your bank upfront ASAP as many of them will let you reduce your repayments by around 50% for up to 6 months. RAMs for example state this as a ‘twice during the life of the loan lifestyle feature’ to cover these tight times. Taking a pro-active approach to the problem helps all parties involved.
[
]
Mel
[email protected]Thanks for the replies guys,
interesting that they give you so long before they want their house back![}
]hopefully the above is info we’ll all never have to use!
Cheers,
Riff[
][8D][]What the mind of man can conceive and believe, it can achieve.
]).
]… if anyone is ever in this situation, sell or move out and rent to keep from mortagee in possession phase.
]
][8D][
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