I get asked this question several times a week so for the next several days as we head into the Thanksgiving holiday break, I am going to finally put it all down on paper :-)
I am an agent in Ohio so I can only speak for how things work here. I am also not a lawyer and I am not giving and cannot give legal advice. Now that I made that disclaimer here goes....
When you sign a mortgage you are making a promise to repay a debt. That mortgage is filed and recorded and is your proof and your lender's proof of what was promised. No one "gives their house back to the bank" as it is often said, the bank does not own your home just because they have a mortgage on it. The deed holder (usually the person who owes the mortgage but not always) owns the home. Your lender can only take ownership of your home without your permission through foreclosure in Ohio. Foreclosure is a lawsuit that is brought against someone who is not meeting the terms of their mortgage so that the lender can claim the asset that is backing the mortgage- your home.
As long as you are meeting the terms of your mortgage you will likely never hear from your lender.
It's when you miss a payment that you get on speaking terms :-)
Generally in my area the lender doesn't take too forceful of an action until you get about 3 payments behind. Real estate and mortgage pros will often call this being "down" so if I say the owner is three months "down" it means they are 90 days late on payments. Although most mortgages have a clause that will allow the lender to take action against you at 30 days late or more, generally you won't get much more than a few collection calls until the 90 day mark. Some lenders are more aggressive (one lender I know of calls a week before a payment hits the past due mark if a borrower has been shaky in the past) others are very laid back and don't call at all until a borrower gets dramatically behind.
When you hit three months down that's generally when they start to get concerned.
Tomorrow I'll explain what happens next ....
