How to Remove Mortgage Lates
So you got a “mortgage late”. You thought you paid your mortgage on time, but for some reason the bank never got your payment.
It happens everyday. Homeowners fail to pay their mortgage on time for one reason or another. I’ve heard every excuse in the book as an Account Executive. But usually mortgage lates occur when homeowners are between homes. It’s understandable when you move from one home to another, paying off one mortgage and acquiring a new one. But you need to be extremely careful during that period to ensure everything is paid.
Mortgage lates kill your credit score. And mortgage lenders and banks aren’t particularly keen on lending to homeowners who couldn’t pay their mortgage on time in the past.
However, because of the frequency of mortgage lates committed by homeowners in recent years, mortgage lenders and banks have begun to allow 1×30 mortgage late in the last 24 months.
Unfortunately that only allows you to be late once in the last two years. What happens if you miss your payment more than once, or get a rolling late which essentially counts for two late payments? Or if you get a 60-day late, or worse? So what do you do?
You’ll likely need to get those mortgage lates removed from your credit report if you plan on financing any new lines of credit, especially if you plan on getting a new mortgage, or refinancing your current mortgage. If you don’t remove those mortgage lates, you’ll be paying a premium for any new financing you qualify for.
Here’s the problem. If your mortgage late is substantiated, there is little you can do about removing it from your credit report. You got the late for a reason that was nobody’s fault but your own, and you have to pay the price.
But if for any reason that mortgage late was the fault of the bank or lender, you can get it removed from your credit report.
The first step is to determine what mortgage is showing up late on your credit report. Get a free credit report and find out exactly when and from whom the mortgage late is reporting.
The next step is to call, e-mail, or write to the lender or bank reporting the mortgage late on your credit report. Discuss the late with a representative of the bank or lender and explain why you believe it is erroneous. This step can be quick and easy, or painful depending on how easy it is make your point and clear up the mistake.
Assuming the bank or lender recognizes their error, they will send you a letter on their company letterhead detailing the mortgage late, complete with the account number and the time the late or lates occurred.
Once you get this letter, it is essential to keep it in a safe place, or even make copies of it. You will use this letter next time you apply for a mortgage or another line of credit.
If you need to resolve the mortgage lates immediately, once your credit is pulled by a bank or lender, simply send the letter to the credit company the bank or lender used to pull your credit. Once they receive the letter, they will be able to remove the late(s) and issue a credit supplement. This will solve the mortgage late problem, but your Fico score may still be deflated for a while before the credit bureaus take notice. In that case, you will likely need to do a rapid rescore as well to update your scores immediately.
If you aren’t doing any new financing, but want the mortgage lates removed, simply make a copy of the letter, and send a copy to each of the three main credit bureaus. Explain that you want the mortgage lates removed and they will get them removed. This is a great way to remove the lates, but it will take time, so this method isn’t useful if you need quick removal.
Remember, if your mortgage lates were your fault, there is very little you can do to remove the lates. Don’t make matters worse by failing to pay the mortgage for subsequent months while the bank or lender works to resolves the situation.
Do not waste your money on rapid rescoring if you don’t have a legitimate excuse for the lates, or paperwork to document any error made by the issuing bank or lender.
Always pay your mortgage on time, no matter what the circumstances. Mortgage lates are one of the best ways to harm good credit, and poor credit will lead to high interest rates.
