If you are behind on your mortgage, contact your loan servicer immediately and ask about forbearance, a repayment plan or a loan modification, and call a HUD-approved housing counsellor free at 1-800-569-4287 for help negotiating. Check whether your state has a homeowner assistance programme. Never pay upfront fees to companies promising to stop foreclosure.
How it works
The short version, before the detail.
Foreclosure is the legal process a lender uses to take a home after the borrower stops paying. Federal rules generally prevent servicers from starting foreclosure until a borrower is more than 120 days delinquent, which gives time to seek alternatives. States then set the procedure - some require a court case (judicial foreclosure), others allow a faster non-judicial process.
Servicers must offer to evaluate you for loss mitigation options. Forbearance temporarily pauses or reduces payments. A repayment plan spreads arrears over future months. A loan modification permanently changes loan terms - interest rate, length or balance - to make payments affordable. For FHA, VA and USDA loans, specific programmes apply.
If staying is not possible, a short sale or deed-in-lieu of foreclosure can avoid a foreclosure judgment and sometimes includes relocation help.
Submitting a complete loss mitigation application on time triggers protections against 'dual tracking' - generally a servicer cannot move forward with a foreclosure sale while a complete application is being considered if it was submitted early enough.
Scams target homeowners in this situation: companies that charge upfront fees, ask you to sign over your deed, or tell you to stop talking to your lender. HUD counselling is free and independent.
Communicating in writing protects you. Send hardship letters and loss mitigation applications in ways you can prove - the servicer's online portal with screenshots, fax confirmations or certified mail - and keep a log of every call with dates and names. Servicers must acknowledge loss mitigation applications and tell you if anything is missing within set timeframes, and must give you a written decision on a complete application.
Who usually qualifies
Factors the agency looks at. Only they make the final decision.
Options depend on who owns or insures your loan and your state's foreclosure process. A HUD counsellor can identify which programmes apply.
How to apply, step by step
Contact your servicer right away
Explain the hardship and ask about loss mitigation options. Note the date and name of who you spoke to.
Call a HUD-approved counsellor
Free help preparing your application and negotiating.
Submit a complete loss mitigation application
Include hardship letter, income, expenses, tax returns and bank statements. Keep copies and proof of delivery.
Check state homeowner assistance
Some states run programmes that help with arrears.
Respond to every notice
Do not ignore foreclosure papers. If a court case is filed, respond and consider legal aid.
Consider alternatives if needed
Short sale or deed-in-lieu can avoid a foreclosure judgment.
Avoid scams
Never pay upfront fees or sign over your deed.
What to have ready
Missing one item is rarely a reason to wait - start now.
- Mortgage statements and loan number
- Hardship letter explaining what happened
- Proof of income - pay stubs, benefit letters
- Recent tax returns
- Bank statements
- List of monthly expenses
- Any notices from the servicer or court
What happens after you apply
How it compares
Similar programmes, and which one fits which need.
| Programme | What it covers | Best for |
|---|---|---|
| Forbearance | Temporary pause or reduction | Short-term hardship |
| Repayment plan | Arrears spread over months | Income has recovered |
| Loan modification | Permanent new terms | Long-term reduced income |
| Short sale / deed-in-lieu | Exit without foreclosure judgment | Keeping the home is not feasible |
Real situations
How this plays out for people in common circumstances.
Job loss, now re-employed
A homeowner missed four payments after a layoff but has a new job.
A repayment plan or modification that adds arrears to the loan could bring the account current.
Permanent income drop
After a disability, a homeowner's income is lower permanently.
A loan modification reducing payments is explored with a HUD counsellor.
Inherited a house
A daughter inherited her mother's home with a mortgage.
As a successor in interest she has rights to information and loss mitigation evaluation.
Offered 'guaranteed' rescue
A company offers to stop foreclosure for an upfront fee.
This is a red flag. Free HUD counselling is used instead.
What people miss
True, rarely explained, and it changes the outcome.
120 days gives time
Foreclosure generally cannot start before then - use it.
Complete applications trigger protections
Submit early and completely.
Counselling is free
No need to pay anyone.
Heirs have rights
Successors in interest can seek modifications.
Taxes and HOA dues can cause foreclosure
Address those too.
Common reasons people get stuck
Ignoring calls and letters
Communication keeps options open.
Incomplete applications
Missing documents delay protection.
Paying scam companies
Never pay upfront fees.
Moving out early
You own the home until sale; leaving can complicate options.
Missing court deadlines
Respond to every filing.
How it differs by state
States choose judicial or non-judicial foreclosure, set timelines, and some require mediation. Some run homeowner assistance programmes. Your HUD counsellor and legal aid know local rules.
Key terms explained
The words on forms and letters, in plain English.
- Loss mitigation
- Options a servicer offers to avoid foreclosure, such as forbearance, repayment plans and modifications.
- Forbearance
- A temporary pause or reduction in mortgage payments during a hardship.
- Loan modification
- A permanent change to loan terms to make payments affordable.
- Dual tracking
- Pursuing foreclosure while reviewing a loss mitigation application, restricted by federal rules.
- Judicial foreclosure
- Foreclosure that goes through the courts, used in some states.
- Successor in interest
- Someone who inherits or receives a home with a mortgage, with rights to information and loss mitigation.
Questions people ask
What should I do if I cannot pay my mortgage?
How many missed payments before foreclosure?
What is mortgage forbearance?
What is a loan modification?
Can I stop a foreclosure sale?
Is there government help for homeowners behind on mortgage?
How do I avoid foreclosure scams?
What is a short sale?
What is a deed-in-lieu of foreclosure?
Can I get help if I inherited a house with a mortgage?
Can I be foreclosed on for unpaid property taxes?
Will foreclosure ruin my credit?
Can I rent my home if I cannot afford the mortgage?
Can I get a loan modification if I am unemployed?
What is a partial claim for FHA loans?
Can I sell my house to avoid foreclosure?
Can I stay in my home after a foreclosure sale?
Numbers to call
Free lines. We are not affiliated with any of them.
Official sources
Current figures and applications live here.