Mortgage Pay on Time (not in grace period)

[BK09]

We recently filed ch 13 and our attorney advised up to pay our mortgage by the due date (first of month) and not to utilize the grace period (thru 16th). She said the mortgage co. could actually consider us late and come after house if we pay in grace period.

Anyone heard or had any issues with this? I currently pay on the 15th and don't know if I can scrounge up enough cash to make back to back payments.

I thought about calling the mortgage co for clarification but they are not really on my side. I haven't consulted attorney and told her this is probably not possible, will do it on monday. Any help is appreciated.

[optimistic1]

I was worried about this topic as well, since I do what you do, and pay within the grace period.

My attorney (an everyone will have a different opinion), said that the mortgage company could care less, and wont do anything unless I become delinquent.

My personal opinion is this.

I honestly do not think that there is someone at the mortgage company that just sits there and purposely tries to ruin your Chapter 13, all because you paid past the first of the month.

The mortgage contract itself clearly states that there is a grace period, so what is it that you are violating?

In all honesty, mortgage companies simply do not want your house, with todays market and values, they would lose money, plain and simple.

I would just pay when you can, within the grace period, and not worry.

Seeking clarification on the issue will be quite difficult, you would need to possibly contact someone within the mortgage company's bankruptcy dept. and see what they have to say.

[Flamingo]

Pull out your mortgage information you obtained at settlement. Read the due date and payment clauses. It should tell you everything you need to know. Technically, the due date of the payment is xx/01/xxxx. Most loans don't have grace periods but many mortgages do. No late fee is applied until after the last day of the grace period (usually 10 days) so you should not be late during the grace period. However, paying by the actual due date of xx/01 is the right thing to do to show the mortgage company you can make the payment on time and during a Chapter 13 it is always best not to be late with any payment of any kind. That is probably why your attorney wants you to ensure you make it by the actual due date.

I know how hard it is with bi-weekly or weekly paychecks to budget out making that mortgage payment by the 1st of each month. However, it can be done if you take the time to work out a budget and stick to it.

[optimistic1]

If my mortgage company wants me out for paying within the grace period, then they can have the house, I owe 3 times what its worth, all they would accomplish is losing a substantial amount of money.

[Flamingo]

If my mortgage company wants me out for paying within the grace period, then they can have the house, I owe 3 times what its worth, all they would accomplish is losing a substantial amount of money.

On the reality side of this, there are terms you agreed to when signing the mortgage documents. One of those terms was to pay the monthly mortgage payment by a certain day of the month (sometimes you are given a choice of the day). Whether or not you follow them is your own personal decision which affects your own personal credit. But making them monthly during the grace period and not going beyond should not be a big issue unless there is verbiage in your mortgage contract stating otherwise. Your key to your matter is whatever is stated in your payment clauses as to due date and grace period. If you don't have a copy of that information, call your mortgage company and obtain it so you know where you stand as to your decision.

[ShouldWeFile]

It would not make sense for any creditor to take action on a 15 day 'default,' since by the time any action was taken, it would (likely) be quite easy for the debtor to cure the default.

I would be willing to bet they don't even consider it a default if it is paid within the grace period. As Flamingo stated, the mortgage note is the binding document that should spell out the definition of 'grace period,' 'defualt,' etc...

[optimistic1]

According to my mortgage contract, and probably like 99% of other mortgage contracts, it does state the due date as the first of the month. Although, it does state that if you pay 15 days past the due date, you will be assessed a late fee. (HENCE A GRACE PERIOD).

When I signed up online to make payments via my checking account, it gave me the option of paying on the first day of the month, all the way to 14 days past the due date. I selected 13 days past the due date.

I still do not see the point in a mortgage lender causing such a commotion over you not paying on the first, by the time they even talked to the trustee, you would have paid it already.

What is it that they would be gaining? Destroying your Ch.13 plan? So the unsecured creditors can attach liens and garnish your paycheck? All that would result in would be defaulting on your mortgage, and leaving the bank with a underwater loan.

I just dont see the point or sense in causing that much trouble over something so minuscule.

[Flamingo]

From WikiAnswers - this may help...

"The grace period is the time your mortgage company allows before they charge a late payment fee. It has nothing to do with your due date; in other words, it is not a substitute due date. Your due date is the date you agreed to make your payment when you signed the mortgage contract, usually the first of the month, and you are late the next day. That is why your mortgage company calls you. But there is a way, in fact a few different ways, to stop the calls.
1. If you know you cannot have your payment made by your due date, call your mortgage company yourself. When you call, ask to speak to the collections department. The reason you should speak to collections instead of customer service is that the collections department can put a hold, typically up to 7 days, on the phone calls. Just tell them when you plan to make your payment, the amount you intend to pay, and the method of payment you plan to use.
2. Call the collections department and ask if you can do a post-dated check-by-phone. There is usually a charge for doing this, but it will stop the calls until the next month.
3. Set up an automatic draft from your checking account. It typically takes two bill cycles for the automatic draft to take effect, so you will need to make another payment in between the time.
4. On a new loan, the mortgage company's computer will typically call a new customer every month until a payment pattern is established. If you make your payments about the same day every month, the computer will recognize this after about 6 to 8 months, and it will stop calling, unless that payment pattern is broken. Again, if you know you're not going to make your payment on the date you usually make it, be proactive and let your mortgage company know when you plan to make the payment.

Again, the grace period has nothing to do with your due date, it's just the time they allow before they charge you a late fee. "

[amjo30]

We recently filed ch 13 and our attorney advised up to pay our mortgage by the due date (first of month) and not to utilize the grace period (thru 16th). She said the mortgage co. could actually consider us late and come after house if we pay in grace period.

Anyone heard or had any issues with this? I currently pay on the 15th and don't know if I can scrounge up enough cash to make back to back payments.

I thought about calling the mortgage co for clarification but they are not really on my side. I haven't consulted attorney and told her this is probably not possible, will do it on monday. Any help is appreciated.

yes, I was told the same thing. I also experienced last month I paid my mortgage on the 6th and I received a call on the 7th asking if I had sent a payment. so I believe its true that you lose your grace period.

[optimistic1]

Well, if I must do that, I can just adjust my budget accordingly and get used to it. =(

[BK09]

Thanks for optimistic and flamingo..........I'm going to first call the bankruptcy division at the mortgage company and seek some type of clarification. Ultimately, I'm hoping work something out for the may payment and try to scrounge up enough to start paying on June 1 every month.

341 is scheduled for Friday 5/8..........I'll keep you posted on this issue and any others that arise between now and then.

[optimistic1]

Good luck to you, my honest feeling is that no one will even care if you dont pay on the first, just dont get out of hand and become a whole month late on the mortgage.

[holding on]

I had the same worry too, and doubled because I was putting mortgage arrearage into the plan. I contacted the lender (bankruptcy dept) and asked if it was ok if I payed a little extra on top of the regular payment, but by the the grace period. So at some point I could have enough to cover the payment on the 1st.

They told me as part of their 'bankruptcy assistance policy' as long as I paid the full amount by the end of the month, they considered it on time. But every payment I schedule I'm sure to ask them the status of my mortgage and if there are any issues. BUT...there is that little issue of mortgage interest. Not paying on the 1st may not incurr late fees, but it does push back money to the end of the loan.

[optimistic1]

So by that did they allow you to pay past the first without issue?

[holding on]

Yes. no late fees, no frowns.