I have not made mortgage payments for over 120 days, am I eligible for the payment plan option?

by Thomas D. Richards, Lawyer Referral Service Panelist

With a Payment Plan, the foreclosure case gets dismissed.  You and the lender agree that you will keep making your monthly payments going forward, but you also agree that you can afford to make additional payments each month toward your back payments and get caught up in an agreed-upon time frame.  Your interest rate will stay the same and your monthly payment is the same as in your original mortgage terms.  If it is an ARM (Adjustable Rate Mortgage), the amount on future payments will be adjusted the same as before.  Usually, the lender will expect you to have the income stream to prove that you can do this.

The lender will also make you pay all late fees, expenses incurred in the foreclosure referral to the law firm, and any legal fees incurred while the law firm had your case.  You will have to pay all of these fees and expenses as part of the Payment Plan.  These fees and expenses can be several thousand dollars.  You also will have to prove to the lender that you have the income to make the future monthly payments and to pay the extra amount each month toward the back delinquent payments.  Chances are that if you are four months behind in back payments that you do not have the income each month to make even the regular monthly payments.  If you do not have a sudden increase in income to be able to make the Payment Plan work, then this option is not for you.

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