Missed Mortgage Payments? It’s not too Late!

The Serious Consequences of Missed Mortgage Payments

Imagine this: You’ve been making mortgage payments on time for years, but then an unexpected financial crisis—job loss, medical emergency, or rising expenses—throws your budget into chaos. You have missed mortgage payments, thinking you’ll catch up next month. But then, another payment is due, and suddenly, you’re two months behind. The lender starts calling, and you receive a notice of default.

What happens next? How many missed mortgage payments can you have foreclosure? What are your options to prevent losing your home?

Missing mortgage payments can have serious consequences, but there are steps you can take to recover and avoid foreclosure. In this guide, we’ll break down what happens when you miss a payment, how it impacts your credit, legal risks, and practical solutions to get back on track.

1. What Happens When You have a missed mortgage payment?

Step 1: First Missed mortgage Payment (0-30 Days Late)

• Most lenders offer a grace period (typically 15 days) before charging a late fee.
• No impact on your credit score if you make the payment within this period.
• After 30 days, the missed payment is reported to credit bureaus, which lowers your credit score.

Step 2: Second Missed Mortgage Payment (30-60 Days Late)

• The lender may call or send warning letters urging payment.
• A second missed payment causes more damage to your credit score.
• Your lender may apply penalties and late fees, increasing the amount owed.

Step 3: Third Missed Mortgage Payment (90+ Days Late)

• The lender sends a Notice of Default (NOD), warning of possible legal action.
• At this stage, lenders may offer loss mitigation options like loan modifications or repayment plans.
• Foreclosure proceedings may begin if the situation isn’t resolved.

Step 4: 120+ Days Late (Foreclosure Risk Increases)

• Lenders may initiate power of sale or foreclosure (depending on your province).
• You may lose your home if no action is taken to catch up on payments.

2. How Does Missing a Mortgage Payment Affect Your Credit Score?

Late Payment Status	Impact on Credit Score	Duration on Credit Report
30 Days Late	Minor impact	7 years
60 Days Late	Moderate impact	7 years
90+ Days Late	Severe impact	7 years
Foreclosure	Drops score by 150-250 points	6-7 years

• One missed payment can drop your credit score by 50-100 points.
• Multiple missed mortgage payments can reduce your score by 200+ points, making it harder to qualify for loans.
• Foreclosure has long-term consequences—making it difficult to rent or buy a home in the future.

📌 Pro Tip: If you’ve missed a payment, work on catching up before it reaches 60-90 days overdue to prevent severe credit damage.

3. Legal Consequences of Mortgage Delinquency in Canada

Foreclosure vs. Power of Sale: What’s the Difference?

Process	Foreclosure	Power of Sale
Who owns the home?	The lender takes ownership	The borrower retains ownership
What happens after the sale?	Lender keeps all proceeds	Borrower receives excess funds (if any)
Timeframe	6-12 months	3-6 months
Common in Canada?	❌ Rare	✅ Most common

• In most provinces, lenders prefer power of sale because it is faster and cheaper.
• Foreclosure is rare in Canada, as it requires lengthy court proceedings.

4. How to Recover After Missing Mortgage Payments
5. Contact Your Lender Immediately

• Many lenders offer solutions like loan modifications or deferred payment plans.
• Don’t ignore calls or letters—this can limit your options.

2. Explore Refinancing Options

If you have equity in your home, refinancing can help you catch up on missed mortgage payments:

• Home Equity Loans: Borrow against home equity to pay off arrears. Learn more.
• Second Mortgages: Get a second loan to cover missed mortgage payments. Explore second mortgage options.
• Debt Consolidation: Combine debts into a single lower-interest loan to ease financial strain.

📌 Best For: Homeowners with at least 20% home equity who need to stop foreclosure.

3. Sell Your Home Before Foreclosure

If refinancing isn’t an option, selling before the lender takes control can:

• Protect your credit from foreclosure.
• Allow you to pay off your mortgage balance and avoid legal consequences.

4. Seek Government Assistance

• CMHC Mortgage Payment Deferral – Available for homeowners facing temporary financial hardship.
• Provincial Mortgage Assistance Programs – Some provinces offer grants or low-interest emergency loans.
• Local Housing Stability Programs – These provide short-term financial help to prevent foreclosure.

🔹 Check with your province’s housing authority for eligibility details.

5. Case Studies: Real-Life Mortgage Recovery Stories

Case Study #1: A Family Saves Their Home with Refinancing

📍 Mississauga, ON

• The Patel family had 4 missed mortgage payments due to unexpected medical expenses.
• Their lender issued a Notice of Default, and foreclosure was imminent.
• They contacted TurnedAway.ca and secured a home equity loan, paying off missed payments.
• Outcome: Their credit score improved, and they avoided foreclosure.

✅ Key Takeaway: Homeowners with equity can use refinancing to prevent losing their home.

Case Study #2: A Self-Employed Borrower Negotiates Loan Modification

📍 Calgary, AB

• David, a self-employed consultant, had irregular income and missed 3 payments.
• He negotiated a loan modification, reducing his mortgage payment by 20%.
• Outcome: He kept his home and rebuilt his credit score within 18 months.

✅ Key Takeaway: Communicating with your lender early can prevent legal action

Frequently Asked Questions (FAQs)

1. Can I Skip a Mortgage Payment?

Some lenders offer “skip-a-payment” options, but these increase interest costs.

2. How Many Mortgage Payments Can I Miss Before Foreclosure?

Most lenders start legal action after 3-6 missed payments, but this varies by province.

3. Can I Get a Mortgage After Missing Payments?

Yes, but it may require alternative lenders or private mortgages with higher interest rates.

4. Will My Lender Let Me Catch Up on Missed Payments?

Many lenders allow repayment plans or loan modifications if you contact them before foreclosure starts.

5. Can I Remove Missed Mortgage Payments from My Credit Report?

Missed payments stay on your credit report for 7 years, but timely payments can help rebuild your score.

7. Conclusion: Take Action Before It’s Too Late

Missing mortgage payments can lead to foreclosure, legal action, and credit damage, but proactive steps can help you recover. Whether through refinancing, negotiating with your lender, or seeking government help, there are solutions available.

📞 Call us at 1-855-668-3074 or Apply Now to explore your options and prevent foreclosure today.