Understanding Mortgage Default Rate in Denver, Colorado
What is mortgage default?
According to RocketMortgage, “Mortgage default occurs when a homeowner fails to uphold the agreed-upon terms defined in their promissory note or deed of trust they signed when taking out their mortgage. It’s possible to default on a mortgage loan in a few ways, the most common being if a homeowner stops making monthly payments.”
Statista.com says that in the United States, the delinquency rate on payments (over 30 days) reached 3.5 percent in the first quarter of 2023, down from 8.22 at the beginning of the pandemic.
How does the mortgage default process work in Colorado?
The mortgage default process begins when your Denver mortgage loan payment is 30 days overdue. At this point, the lender will send you a warning letter giving you a chance to catch up on your payments. If you don’t have the funds, your mortgage lender can start looking into selling the house.
Common causes of mortgage default
Bad luck can hit anyone in Denver and cause them to get behind on mortgage loan payments and go into mortgage default, and it can happen quickly. According to Kiplinger.com, “Some 61% of Americans of all income brackets were living paycheck to paycheck as of July.” That’s the majority of us!
Common problems that cause mortgage default include loss of employment, high mortgage rates, medical problems, inflation, or anything that negatively affects household income.
What can you do if you’re facing mortgage default in Denver?
Fortunately, there are a few things you can do if you’re in mortgage default:
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Try to refinance your house to get lower mortgage payments.
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Talk to your lender and see if you can work out a payment plan. According to the U.S. Department of Housing and Urban Development (HUD), “If you are experiencing difficulty communicating with your mortgage lender or servicer about your need for mortgage relief, there are organizations that can help by contacting lenders and servicers on your behalf. HUD also provides other assistance to people who are facing mortgage default.
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If you have an FHA loan, call the agency at 800-225-5342 to see if any help is available.
Navigating mortgage default may feel overwhelming, but exploring your options—whether through refinancing, lender negotiations, or seeking assistance from HUD—may help you find a path forward.
This blog is for informational purposes only and should not be considered legal advice.
