How do banks determine mortgage delinquency?
Essentially, it mirrors credit reporting. Though a borrower is technically delinquent on a loan if a payment is one day late, ad late charges are assessed after 15 days in most cases, the statisical reporting of deliquency occurs when a borrower becomes 30 days late.
It is actually the note and the terms contained in the note coupled with the borrower's payment history that determines delinquency, not the bank. Degrees of delinquency are measured in 30 day windows. When a borrower becomes 90 days late [due for 4 payments], collection activity turns to a demand for payments to be brought current to avoid foreclosure proceedings. Those begin in most cases at 120 days late [due for 5 payments]. When percentages are reported by the media insofaras foreclosure rates, etc., these are the statistics that are being used. All lenders and servicers have monthly reporting requirements on delinquent ratios. Payment patterns determine those ratios.