The following is my answer to a Quora question: “My mortgage is late. Should I call my bank and explain why?”
Yes. When it comes to taking loans from any financial institution, it is always important to be in constant communication and update them. A bank can tolerate late payment if they understand the reason why payment is late, and there is a date of payment. Even if there is a contention, this communication ensures that you have an avenue to negotiate, and even get a waiver on late fees.
Going silent on the bank sends them the signal that you are a likely recalcitrant defaulter, and they will treat you accordingly, including levying punitive fees. If you have failed to respond to their correspondence, they move your loan to the bad debt ledger, and that is a precursor to further legal action, including application for bankruptcy.
Terence K. J. Nunis, Consultant
[Shared with permission from: Quora Answer: Should I Call My Bank to Explain Why My Mortgage is Late?]
Key takeaway is: always be in constant communication with the bank or the financial institution you are dealing with.
You could get a waiver for late payment fee. Sometimes, refinancing might be the solution for you.