Some homeowners underwater on their houses—who owe more on their mortgages than their homes are worth—wonder what would happen if they were to stop paying their mortgages.  

When lenders do not receive payments, the first action taken by the lender is to report the missed payment to the credit bureaus by the first day of the next month.  Sometimes this can happen in as little as two weeks from the due date, depending on when the payment is due.  Generally, this action will leave a negative mark on a credit report and decrease the homeowner’s credit score by as much as 200 points.

Because of the negative mark on the homeowner’s credit report, within the next 30 days, homeowners can expect their other creditors to take note of the late payment and to take action.  Credit card issuers may raise interest rates, lower credit limits, or close credit card accounts.  The borrower’s auto insurance, student loans, and other forms of credit also may change, as these are tied to the borrower’s credit score as well.

If the homeowner does not pay for 90 days, the lender likely will start calling, trying to persuade the homeowner to enter into a loan modification.  If a loan modification cannot be agreed upon between the homeowner and the lender, and the homeowner continue missing payments, the homeowner likely will be served with a foreclosure notice.  After the foreclosure notice is received, the lender asks a court to issue a judgment against the homeowner, and a county sale is arranged.

Homeowners at risk of defaulting on their mortgages, or those who already are behind, should contact their lender immediately to work out a repayment plan and/or loan modification.  


At County Properties 23 years of brokerage experience and trust! We offer free counseling in real estate re; home values and information on options of selling vs Foreclosure.  If you have equity in your home, we will sell your home and get top dollar in this challenging market. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also. Please feel free to contact me today for free counseling at (619) 301-0200 visit our website, click

By the way…if you know of someone who would appreciate the level of service I provide, please call me with their name and business number and I’ll be happy to follow up and take great care of them.