It's not always easy getting your mortgage payment in when it's due -- even when the mail is on time.

Now, along with extra holiday mail, the anthrax scare is slowing the sorting process and, chances are, you've experienced some delays in mail deliveries lately.

That habit of mailing your mortgage check, timed to arrive a day before late charges are levied, could begin to cost you cash and a credit ding or two.

Electronic mortgage payments could be a viable alternative.

Lenders have eased up foreclosure and collections actions on military personnel and on those directly affected by the events of September 11. Both actions have had a positive trickle-down effect on many mortgage holders.

However, lenders retain the right to penalize you with late charges and credit report blemishes if you are late and were in no way affected by the events of 911.

Electronic mortgage payments -- and those made by phone -- can not only save you the cost of postage, but perhaps also the cost of late fees and ultimately, damage to your credit -- provided your lender offers the option.

It's no wonder payments made by checks is giving way to electronic payments, according to a recent "Check and Electronic Payment" study released by the Federal Reserve.

American consumers and businesses make 80 billion retail payments annually, nearly 50 billion by check and 30 billion by electronic instruments, according to the first comprehensive studies of the retail payments system by the Federal Reserve System in more than 20 years. Checks have declined from approximately 85 percent of non-cash payments since the last study in 1979 to about 60 percent today, according to the study which included responses from approximately 1,300 financial institutions, including banks, thrifts and credit unions, and 89 electronic payment processors.

"If you compare these results with 1979 research estimates it seems clear that the proportion of check payments is declining as substitution for electronic payment instruments accelerates", according to Cathy E. Minehan, president of the Federal Reserve Bank of Boston.

Online payment options can be set up in minutes, but you'll want to take some time to prepare your computer and yourself for this new way to pay.

Electronic payments directly to your lender or loan servicer are generally a better idea than second-party electronic bill payment services -- especially if you are only going to pay your mortgage online.

The vast majority of Epinions.com's visitors -- real consumers who've used the services -- give high ratings to virtually all electronic bill payment services, but if you only want to pay your mortgage online and are doing so to uncomplicate your life, you may not want another administrative layer to wade through with a complaint if there is a question about your electronic payment.

Also, some of the online bill-pay services charge for the convenience. If your lender charges a fee for an electronic payment option -- and most don't -- you'll have to determine if the cost is worth the value. (Most lenders don't charge fees because with electronic payments they get cash quicker and thus can earn additional interest on such funds. In effect, electronic payments can actually be a money-maker for lenders.)

In any event, the Pittsburgh, PA-based Computer Emergency Response Team Coordination Center, or CERT/CC advises that you begin with a well secured home computer outfitted with virus protection software to keep out the bugs, a firewall to keep cyber thugs away from your personal financial data and a secure Internet browser that encrypts confidential information you send and receive.

When you sign up, you'll likely get a password for subsequent use of the electronic bill payment service. CERT/CC says change it frequently and never give the password to anyone -- not even the lender or third party online bill-payment service.

Also, before you sign up, read your lender's Web site privacy policy. Good privacy policies detail what they do with the information that you provide them. Also federal law gives you new rights to opt out of having financial institutions pass around your private information for marketing purposes. Even if you've already asked your lender not to share your information in the real world, using its Web site for electronic bill-payment purposes could expose you to cyber marketing -- spam.

The Federal Trade Commission, which regulates online commerce, also says you should understand what recourse you have if you run into problems with your payment, including your lender's policy to resolve a complaints about, say, posting your payment late, not posting your payment and other problems.

You'll initially have to designate an account -- typically a checking account -- from which the payment will be drawn on a specific date each month or only when you request it. The former can really take the guess work out of on-time payments, but the latter is for you if your cash flow is spotty.

In any event, you'll have to remember to notify the lender if you ever decide to close the account that you designated as the source for your mortgage payments.

If you have problems, file complaints regarding electronic payments with the Federal Trade Commission's online complaint form, by telephone at (877) (382 4357), and by mail to, Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington DC 20580.

For more information about online commerce, visit the FTC's "E-Commerce & the Internet" and About.com's "Online Banking Center".

For more articles by Broderick Perkins, please press here.

Published: November 28, 2001

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.