What happens if I stop paying my mortgage?

By | September 4, 2009

Many homeowners are struggling paying all of their monthly expenses and are wondering to themselves “what will happen if I stop paying my monthly mortgage payments?”

First off before we begin, I must say that if you just stop paying your mortgage payments all together and do not try to resolve your mortgage struggles, your home will go into foreclosure. If your home forecloses, you will have to find another place for you and your family to reside.
The main factor as to how long and what type of process the foreclosure undergoes, will always depend on the state’s foreclosure laws. Different states will all pretty much choose there own way to foreclose, either it be done through the judicial or non-judicial process.

In many states  the foreclosure law outlines that the process can be done through either manner. But in most states they choose to go through the non-judicial route. The reason why, is because this way takes much less time to complete and costs less for the lender as well.

Below is a brief definition of the judicial and non-judicial foreclosure process (laws may vary from state to state).

Judicial foreclosure: In order for the lender to foreclose using the judicial process they must first prove that the borrower has defaulted on their mortgage. To do this they must file a lawsuit with the local county court claiming the borrower has stopped making their payments. If the court agrees the foreclosure will proceed and the property will be sold on the date of sale set by the courts. This way of foreclosure is only used when their is no “power of sale clause” present in the borrowers original mortgage or deed of trust.

Non-Judicial: If there happens to be a power of sale present in the mortgage or deed of trust, the lender will go about the foreclosure using the non-judicial process. This route of foreclosure is the most commonly used method throughout the united states. The timeline of foreclosure and the amount of notices you recieve before the house sales will vary from state to state.

Generally you will recieve a notice letting you know about the past due amounts and giving you a certain amount of time to pay. This notice will also be listed in the local newspaper in which the home is located. If you do not bring the loan current or try to resolve the issue, the foreclosure process will then begin. At this time the lender will now set up a Trustee’s sale date. The borrower will be sent this notice informing them of the date the house is due to sell. If the borrower did not attempt to bring their loan current in time, the home will go through foreclosure and sold as scheduled.

So if you quit paying your mortgage payments all together and do nothing to resolve the issue, your home will go into foreclosure and you will be forced to pack your belongings and move. However, you may be able to avoid the foreclosure completely if you; complete a loan modification, short sale, bring the loan current, or possibly even a deed in lieu of foreclosure.

7 thoughts on “What happens if I stop paying my mortgage?

  1. michael ybarra

    i am trying to get bank of america to lower my monthy payment and so for no luck i recenty had a bankruptucy discharge and iam having trouble making my payments i am upside down in my house if i can get my payment lowered ill be o.k.

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  2. Jen Andalou

    I got a loan from Chase 6 years ago for our home in Orange County, CA. At the time the INSISTED on a State Income, Stated Asset loan with no money down because it was the easiest and quickest route. We had 758 credit scores. 6 years later our home price has dropped 51%. 2 years ago I lost my job and just now got a job. We NEVER missed a payment. During the time I was without work I sent paperwork to Chase 7 times to attempt a Loan Modification. Each time I was told by them that I was missing paperwork which I was not. After 2 years of trying this process, I quit. There was and has been no incentive for a home owner to keep a home and I did NOTHING to affect the market. The bank was given fair warning 2 years ago that our savings would run out and they refused to assist. We never missed a payment and each time we called to ask about the Loan Mod we were told that the best way to get their attention is to stop paying. We stopped 2 months ago… CHASE, do I have your attention now?

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  3. JFO

    Jen Andalou: Relative to the comment you left above, I am very interested to know what, if anything has transpired. My husband and I are in a similar situation, also w/ a Chase mortgage, and are just hitting a point where we simply cannot handle all of our increasing financial demands. We contacted Chase and in so many words were told that since we had not missed a payment, there was nothing they could do….So here we go. Ugh. Thanks for anything you can share about your experience.

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  4. Jules

    I have been trying to refinance a ridiculous interest rate and take advantage of the lower rates-for two years. I am being told-although I have an 804 credit score and a great job-that I have too much debt to refinance….now it would seem to me, that if you let me refinance, this would LOWER my debt, ISN’T THIS WHAT I AM TRYING TO DO????? I have never missed or been late on a payment, and noone will help me!!! I guess it is time to STOP paying my mortgage too!!! BANK OF AMERICA

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  5. Jules

    Jules: I have been trying to refinance a ridiculous interest rate and take advantage of the lower rates-for two years. I am being told-although I have an 804 credit score and a great job-that I have too much debt to refinance….now it would seem to me, that if you let me refinance, this would LOWER my debt, ISN’T THIS WHAT I AM TRYING TO DO????? I have never missed or been late on a payment, and noone will help me!!! I guess it is time to STOP paying my mortgage too!!! BANK OF AMERICA DO I HAVE YOUR ATTENTION?????

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  6. Donna Stout

    We were able to achieve a loan modification with BOA at 5% but during the process my husband obtained a new job out of state and wants his family with him. I contacted BOA today and was told that we can not let the house go on an assumable mortgage yet we owe far more then the value of our home and it is a manufactured home over 10 years old that banks now won’t even touch. I was requesting to just let it go on an assumable mortgage and just walk away so we were out from under the mortgage and we had a new
    individual to take over and continue on. BOA says we cannot do this under the terms of a modification. I looked over my papers and saw this no where. Any one have any suggestions or legal advise?

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  7. Zan

    Jen Andalou,

    Hi Jen. Please reply . I am identical to you. Bought in 2005, chase loan,orange county, lost job 3 years ago and now working again. NEVER missed a payment, under water 100 k!. Just found out I can’t qualify for govt. harp refi and thinking about stop paying. What has happened? Are you still in the home, modified or foreclosed? Please answer.
    Thanks.

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