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Mortgage payments 90+ days late will trigger the first step in the foreclosure process, the filing of the Notice of Default. In this article, you will learn what a mortgage delinquency is and what the delinquency data looks like in Los Angeles County.
Los Angeles County California has approximately 10 million residents and an average sales price for existing homes of $680,000 as of September 2015. September 2007 saw the peak average price of existing homes in the county reach nearly $731,000 before the floor fell out from under the market and property values started to tumble a few months later as the global financial crisis intensified. The average sales price for existing homes is Los Angeles County finally reached a bottom in February 2012 at nearly $531,000 as mortgage delinquencies increased giving rise to ever increasing foreclosure rates.
In this article, we will take a look at mortgage delinquency rates going back to the year 2000 up to September 2015. The data will only follow mortgages that are delinquent 90+ days, as this is when the lender will typically take their first steps towards foreclosing on a property.
A mortgage payment delinquency occurs when a borrower has failed to make monthly payments required to keep the loan status in good standing based on the terms in the contracts. A mortgage typically becomes delinquent the first of the month following the previous months missed payment from the grace period cut off.
If a mortgage payment with a due date of January 1st, and with a grace period ending January 15th does not receive a payment before February 1st, then this mortgage is technically delinquent by 30 days and will be reflected as such on the borrower's credit report.
Tip: A lender will accept payment after the grace period but before the due date of the following month without a loan being in delinquent status, but the borrower will incur a late charge and other fees as a penalty
Among the 15 years of data on mortgage delinquencies in Los Angeles County, June 2005 saw the lowest volume of 90+ day late payments on mortgages with only 3,678. The peak was reached in January 2010 when 138,293 mortgages were 90+ days delinquent.
If a borrower continues to be delinquent 30+ and 60+ days, they should expect to receive several letters and phone calls from the lender trying to resolve the issue. Delinquent borrowers have up to 90 days to bring their loan into current status by making all the missed payments plus penalties. However, once a mortgage is delinquent 90+ days, the majority of lenders will take the first step in the foreclosure process by filing a Notice of Default (NOD).
It's important for mortgage borrowers to begin resolving the delinquency issue before it reaches the point of receiving a Notice of Default if they can help it. A delinquent borrower has a couple options for help, a HUD-approved housing counselor and by contacting the lender directly. Lenders will try to avoid foreclosure proceedings if they are able to strike a deal with the home owner. HUD-approved housing counselors assist home owners in the negotiation process with lenders.
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