Foreclosure for non-monetary default

Posted By: Ninky

Foreclosure for non-monetary default - 06/23/14 09:43 PM

Can a bank foreclose on a mortgage loan that is current on payments, but is in a status of non-monetary default due to past due property taxes? Tax liens?
Posted By: John Burnett

Re: Foreclosure for non-monetary default - 06/24/14 12:45 PM

I think that if the mortgage loan agreement and state law allow such events to be events of default and allow the servicer to call the loan for the default, the calling of the loan would trigger the start of a 120-day period during which the consumer would have to pay off the loan or risk foreclosure once the 120-day period has elapsed. That's based on the fact that the demand for payment in full effectively makes the periodic payment equal to the payoff figure, and the loan goes into delinquency and stays delinquent unless it's paid in full.

Acceptance of any partial payment that's applied toward the loan during that period, however, may re-start the clock.