Finding Delinquent Mortgagees: Strategies For Locating Late Payments

As of January 2025, over 6 million Americans are facing difficulties in making their mortgage payments, with more than 6.6 million households having fallen behind. This issue is particularly prominent in states like Mississippi, Illinois, and Delaware, with the latter having approximately 14% of households delinquent on their payments. The rising interest rates, particularly for variable-rate mortgages, and increasing insurance costs have been significant contributors to this situation. To address this, homeowners can explore options such as loan modifications, repayment plans, or seeking assistance from HUD-approved housing counselors to find solutions that fit their financial circumstances.

How to find out if someone is late on their mortgage payments

It is important to note that there is no single, centralized database that provides information on whether someone is late on their mortgage payments. However, there are a few ways to indirectly find out if someone is behind on their mortgage:

Public Records

In most states, mortgage records are considered public information and can be accessed through the local county clerk or recorder's office. These records typically include information on property ownership, mortgage amounts, and payment history. However, the level of detail available may vary by state and county.

Credit Reports

Credit reports from consumer reporting agencies, such as credit bureaus, may provide information on an individual's mortgage payment history. Lenders typically report late or missed payments to these agencies, which can negatively impact a person's credit score. However, accessing someone else's credit report usually requires their consent or a legitimate business purpose, such as evaluating their creditworthiness for a rental application.

Legal Notices and Foreclosure Listings

When a borrower falls behind on their mortgage payments, lenders are required to follow a legal process before initiating foreclosure proceedings. This often includes sending notices, such as a "Demand Letter" or "Notice to Accelerate," which may be publicly available through court records or legal notices in local newspapers. Additionally, foreclosure listings or public auctions may provide information on properties that are in the process of foreclosure due to missed mortgage payments.

Direct Communication

If you have a personal or professional relationship with the individual, direct communication may be the most straightforward way to find out about their mortgage payment status. Discussing financial matters can be sensitive, so approaching the conversation with empathy and offering support or resources can be helpful.

Alternative Data Sources

Alternative data sources, such as analytics companies or data brokers, may provide insights into mortgage payment behaviour. These companies often aggregate and analyse various data points, including financial transactions and public records, to make predictions or assessments about an individual's financial behaviour. However, the accuracy and ethical considerations of using such sources should be carefully evaluated.

It is worth noting that the impact of late mortgage payments can vary. Lenders typically offer a grace period, usually around 15 days, before considering a payment late. Additionally, a single late payment may not immediately trigger negative consequences, and lenders often prefer to work with borrowers to find alternative solutions, such as refinancing or payment plans.

The impact of late mortgage payments on credit scores

Paying your mortgage late will impact your credit score, but only if the payment is more than 30 days late. The impact on your credit score will depend on several factors, including the type of credit score involved and your overall credit history. For instance, a late payment will cause a more severe decline in your credit score if you have an excellent credit score versus a poor one. Similarly, missing multiple payments in a row will damage your credit more than missing just one. According to FICO's credit damage data, a single late payment can cause a drop of over 100 points on your FICO score, depending on your credit history.

Late payments on several accounts can do more harm than a late payment on just one account. For example, missing several mortgage payments could result in foreclosure, which is one of the most damaging negative marks on your credit score. A foreclosure will be reflected in your credit history, which can further drag your scores down and make it much harder to be approved for another mortgage in the near future.

However, the impact of a late mortgage payment on your credit score is not always negative. Borrowers with poor credit may benefit more from consistent mortgage payments given their lower starting point. Loans originally associated with lower scores experience the most meaningful gains, while those with higher scores remain relatively flat or suffer a small drop.

To prevent late payments from damaging your credit score, it is recommended to check your credit reports frequently or at least annually. Additionally, you can take steps to rebuild your credit after a late payment, such as paying all of your bills on time and staying on top of your credit utilization ratio.

How to get help if you are late on your mortgage payments

If you are late on your mortgage payments, the first step is to not panic. Many people face this issue, and there are multiple ways to get help.

Your lender will likely give you a grace period of 15 days, during which you can pay without penalty. After this, you will start incurring late payment fees, which are usually a percentage of your monthly mortgage payment. For instance, if your monthly mortgage payment is $2,200, a 5% late fee equals $110. Your lender will also likely contact you about the missed payment.

If you know you are going to be late on your mortgage payment, you should contact your lender or mortgage servicer as soon as possible to discuss your options. Many lenders would rather work with borrowers to remedy the situation than seize and sell the home. You can set up a payment plan with your lender to help you catch up on late payments over a fixed timeline. This option may work best when missed payments are due to short-lived financial difficulty. Most payment plans last anywhere from two to six months (sometimes longer), and your monthly payments will increase to compensate for the overdue balance.

You can also seek assistance or find a housing counselor through the Making Home Affordable program, which helps responsible homeowners obtain affordable refinancing or loan modifications to help them stay in their homes. Contact the U.S. Department of Housing and Urban Development (HUD) at (202) 708-1112, or visit the HUD website. A HUD-approved housing counseling agency can help you figure out which available options may work best for you. You can also call (888) 995-HOPE, the Homeowner's HOPE Hotline, to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.

Remember, it is crucial to get ahead of the problem by budgeting and ensuring you can afford the house you are living in. If you are struggling with your mortgage payment, refinancing may be a suitable option to help you get your payment back on track.

How to find a HUD-approved housing counsellor

If you're looking for a HUD-approved housing counsellor, there are several ways to find one. The US Department of Housing and Urban Development (HUD) sponsors housing counselling agencies across the country that offer free or low-cost advice on a range of topics, including renting, defaults, foreclosures, and credit issues.

To locate a HUD-approved housing counsellor in your area, you can:

• Search online: Visit the HUD website (HUD.gov) or the Consumer Financial Protection Bureau's (CFPB) website (consumerfinance.gov/mortgagehelp). These websites provide lists of approved counselling agencies near you.
• Call HUD: Contact HUD's interactive voice system at (800) 569-4287 or the CFPB at 1-855-411-CFPB (2372). These phone services can help you find a housing counsellor or connect you directly with one.
• Use the CFPB's Find a Counselor tool: This online tool allows you to find a list of HUD-approved counselling agencies in your area.
• Call the HOPE Hotline: Available 24/7 at (888) 995-4673, the HOPE Hotline can connect you with a housing counsellor.

Remember, housing counselling recipients should not pay for these services. However, counselling agencies may charge reasonable fees for specific housing education services, provided certain conditions are met, such as informing clients about the fees in advance.

How to catch up on late mortgage payments

If you're late on your mortgage payments, the first thing to do is not panic. Most mortgage companies offer a grace period of around 15 days, during which you can pay without incurring a late fee. After this, late fees will kick in, usually ranging between 3% and 6% of the overdue amount.

Once you've missed a payment by 30 days, your lender will likely report the delinquency to the credit bureaus, negatively impacting your credit score. They will also contact you to discuss the missed payment and may send a letter warning you of potential actions, including foreclosure. Foreclosure proceedings typically begin after 120 days of missed payments, but your lender will take several steps before this stage, such as sending notices and attempting to contact you.

If you're facing financial hardship, it's important to act quickly and contact your lender or servicer immediately to discuss options and work out a relief plan. They may be able to offer solutions like:

• Loan modification: This involves permanently changing the interest rate, term, or both on your mortgage to make your payments more manageable.
• Mortgage forbearance: This is a type of payment relief that temporarily suspends or reduces your payments for a set period. During this time, you are still considered current on your mortgage. Once the forbearance period ends, you'll repay the paused payments in a lump sum or through instalments.
• Repayment plan: You might be able to negotiate a plan where you catch up on missed payments over an extended period.
• Refinancing: You may be able to refinance with a cash-out mortgage that allows you to consolidate your debts and reduce your overall monthly outlays.
• Reducing expenses: Review your budget and see where you can cut back on non-essential spending.
• Applying for assistance funds: There may be government or non-profit programmes that can provide financial assistance.

Remember, it's important to be proactive and communicate openly with your lender to find a solution that works for both parties and helps you avoid foreclosure.

Frequently asked questions