Posted by: admin : Category: Mortgage delinquency occurs when a mortgagor fails to make the required monthly payment on a mortgage in a timely fashion. The mortgage agreement will specify a date each month by which the payment should be made. In addition to this, there is usually a period of time during which late payments are overlooked. This is known as the “grace period”. After that, lenders will usually charge the borrower an additional fee known as a “late fee”. If the lender is persistently delinquent, eventually a notice of default will be issued and the property will be foreclosed. Foreclosure involves significant costs. It will require court proceedings and there is often a requirement to advertise the foreclosure. These costs are passed on to the borrower and added to the existing bill. In such cases the mortgagor requires foreclosure assistance. Financial institutions vary greatly in their attitude towards mortgage delinquency. Some will pursue the foreclosure option right away, while others will take a more relaxed approach.
Lending institutions carefully monitor the level of mortgage delinquencies across the country they operate in. This is known as the delinquency rate. It is regarded as a helpful economic indicator which can provide useful information about the overall health of the economy and how much ordinary people may be suffering.