Don’t make the mistake of believing that simply making your mortgage payments on time is enough to keep the bank from foreclosing on your home. There are other reasons the bank may initiate foreclosure. Any violation of the terms of your mortgage agreement can put you in default, meaning the bank can initiate foreclosure and, ultimately, take your home even if you have never missed a payment.
Reasons for Foreclosure, Even When You Pay on Time
It’s easy for homeowners to think they have nothing to worry about as long as they make their mortgage payments on time. And, for many, that alone is a huge struggle. But the bank can foreclose for many reasons. Depending on the terms of your mortgage agreement, these can include:
- Getting behind on your property taxes
- Getting dropped by your homeowner’s insurance
- Failure to pay homeowners’ association (HOA) dues on time
- Failure to keep the property in a condition that meets the bank’s satisfaction
- Transferring the property to someone else without a “due on sale” clause
The Homeowner’s Insurance Trap
You can lose your homeowner’s insurance by failing to pay or if the insurance company decides not to renew your policy for any number of reasons including claims that you have made or a recent natural disaster in your area. Lenders take insurance very seriously because it protects their investment. Simply losing your insurance will put you in default, but a lot of lenders will purchase “force-placed” insurance to make sure that the property does not go uninsured.
The problem is, this type of insurance is very expensive, often three times as high as the insurance your purchase on your own. The bank pays the premiums and then charges you, adding the cost to your monthly payment. This can quickly lead to you getting behind on your mortgage payments if you are not aware of the charge or if you cannot afford it, putting you in default and leading to foreclosure.
If you are facing foreclosure, you need the help of an experienced foreclosure attorney, even if you have never missed a mortgage payment. Please, contact an experienced foreclosure attorney right away to learn more about your rights and how you can save your home.