‘Deliberate Delinquency’ Is A Risky Mortgage Move

For many years, homeowners who wanted a mortgage modification from their lender had to show at least one missed payment. While this is no longer a requirement, many homeowners are under the mistaken impression that deliberately skipping mortgage payments can strengthen their case when they request a loan modification. Unfortunately, experts say this approach can do more harm than good.

If you truly want to change the terms of your mortgage loan, the federal government’s Making Home Affordable program is a prime mechanism to do so. While the loan modification portion is open to those who have missed payments, the refinancing portion of the program is not. In order to qualify for this federal refinance, you must not have made a payment more than thirty days late. So, deliberately missing a mortgage payment means disqualification from a federal refinance.

Missing mortgage payments also wreaks havoc on a consumer’s credit score. Your most recent delinquent payments hurt your score the most, and those debts paid more than ninety days late – or never – cause serious damage. A pattern of delinquent payments is the most harmful information on a credit report. Once your credit begins to suffer, it may become more difficult to qualify for new mortgage terms.

Homeowners who are serious about seeking a loan modification are best served by simply talking to their lender up front. Risky moves like deliberately missing payments can have harmful, unintended consequences.

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