What Is Imminent Default on a Mortgage Loan?

Imminent default is a technical term in the mortgage industry. The essential meaning is a loan that is not yet in default but that has a high probability of soon being in default.

Definition of Default

Default is the failure to pay the amount due on a loan. On a mortgage, default is failure to make the monthly payment. Several months of not making this payment will lead to the initiation of foreclosure.


The technical meaning of default is one or more payments that have been missed. It also means that the missed payment is more than 30 days late.


The importance of redefining imminent default is that you can only get help with a mortgage if the loan is in default. You can only negotiate with the lender, or apply for government help, if you have missed a payment and are more than 30 days late on that payment.


The benefit of imminent default is that sometimes, such as after the loss of a job or illness, it becomes clear that a borrower is going to default but has not done so yet. Using imminent default as the trigger for aid or negotiations means that the problem can be dealt with earlier.


Traditionally, a borrower can only renegotiate or ask for help on a loan if it is actually in default. By using the concept of imminent default, people who will default on their mortgage in the near future can access help before actually defaulting.