What is risk of one more late mortgage pmt after 7mo's no payment?

[Anonymous]

Going thru Short Sale.

1st Loan repaid, still trying to negociate with second loan to lower the outstanding balance. Don't have answer yet. In two days will be late another month. Is the risk worth the wait?  How much is the impact on our credit for each month late with mortgage payment?  If we wait 2 more weeks, and get the answer we want, we could save over 20,000.00 dollars.  But very unsure, since we settled with the 1st loan provider last month.

[RobertEG]

As I understand your post, you have a loan that you are attempting to refinance, and you dont want to meet current payments,  thus being able to include that amount in your principal on the new loan, which will then be subject to the lower rate?

Kinda confusing, as I would assume that if you are already 7 mos in arrears on that current loan, that would already have substantial impact on the new, prospective lendor's decision on approval of the refinance....???  They are ok with that up to this point?

Have those lates already been reported by your current creditor, and thus aware to your prospective creditor?

[Anonymous]

Not to have to bore you with too much detail. Just need to know if our impact has already happened being 7 months late, how much more could it be impacted by one more month being late. 

We saved the first loan from foreclosure by running to the bank with the past due payments and catching them up just before the deadline Oct 30th.  We have not caught up with the smaller loan of 37,000.00 and are trying to get them to reduce the amount thru our lawyer. Trouble is they are so slow with the correspondence and we don't know if it's worth waiting another month in case we get a "no " answer.  The lawyer says it will take another two weeks to get an answer. Is the impact to our credit worth another month late?

[llecs]

Per FICO scoring, if you are behind 7 months, then possibly you'd have a 30-day late showing, then a 60, 90, 120, and maybe 2-3-4 CO references tossed in there. Adding one more late will not really impact your FICO score if a major baddie updated in the previous month with a major late. Now if the 2nd was mis-reporting in your favor and had not updated with these lates like they should, then adding a major late would drop your scores significantly. But if reporting as they should, then no significant impact if you delay by another month.

In the end you have to ask yourself if FICO is more important than the $$$ saved. Only you can make that call. 

[RobertEG]

+1

If already in arrears on your current loan and your new creditor is aware of that fact, such as by reporting of your current creditor,  I would surmise that would already have significant impact on their lending decision, regardless of whether you tack another month late onto that chain. 

Six months is also approaching the date when many creditors will consider charging-off a delinquent debt.  I would be concerned with the current creditor doing a charge-off, or possibly selling the delinquent debt, prior to the refinace going through, which would throw a whole new monkey wrench into paying off the existing loan as part of the refiance process. 

If another month gives you monetary benefit, your call.  I dont see FICO scoring as the major concern in this scenario......