Legal Definitions - mortgage delinquency

Mortgage delinquency refers to a situation where a homeowner fails to make their scheduled mortgage payments on time. This means the borrower is behind on the money owed to their lender for the loan used to purchase their home. When payments remain overdue for a certain period, typically 30 to 60 days, lenders may impose late fees, report the missed payments to credit bureaus (which can negatively impact the borrower's credit score), or even begin the process of foreclosure, which could ultimately result in the loss of the property.

Here are a few examples to illustrate mortgage delinquency:

• Example 1: Unexpected Job Loss

  Maria worked as a marketing manager but was unexpectedly laid off from her job. While actively searching for new employment, she found herself unable to make her mortgage payment for the current month by the due date. Even though she intends to pay as soon as she secures new income, her missed payment means her mortgage is now considered delinquent.

• Example 2: Major Unforeseen Expense

  The Chen family's home suffered significant damage from a burst pipe, requiring an immediate and costly plumbing repair. To cover this emergency expense, they had to use funds they had saved for their upcoming mortgage payment, causing them to miss the payment deadline. Their mortgage loan is now delinquent because the required payment was not submitted on time.

• Example 3: Business Downturn

  Robert owns a small retail shop that experienced a sharp decline in sales for several months due to a change in local consumer trends. The reduced income made it impossible for him to cover all his personal and business expenses, including his home mortgage payment, for two consecutive months. Robert's mortgage loan is delinquent because he has failed to make two scheduled payments to his lender.