The short answer
If you are behind on your mortgage, contact your servicer right away and ask for a loss mitigation review. Options include a forbearance that pauses or reduces payments, a repayment plan, a deferral or partial claim that moves missed payments to the end of the loan, a loan modification and, if you cannot keep the home, a short sale or deed in lieu. Under federal servicing rules, a servicer generally cannot make the first foreclosure notice or filing until you are more than 120 days delinquent, or while a complete loss mitigation application is pending. A complete application received more than 37 days before a foreclosure sale generally triggers protections against going forward with a sale. A HUD-approved housing counselor can help for free or at low cost, and for-profit companies that charge up-front fees for foreclosure help are a common scam. Keep paying what you can, and keep records of every contact.
Before you call: gather the basics
A few minutes of preparation makes the first call more productive. Have your loan number and latest statement, your gross monthly income and where it comes from, a list of monthly expenses and debts, and a short description of what changed. Find out what kind of loan you have, whether FHA, VA, USDA or conventional, because it decides which programs apply. The statement or the servicer can tell you. If you can, write a one-page hardship letter now, since most applications ask for one.
Step 1: Call the servicer and say the words
The company that sends your bill is your servicer, and it may not be the lender that made the loan. Call the number on your statement and ask for a loss mitigation review. Say that you have a hardship, explain it in a sentence, such as a job loss, reduced hours, a medical bill or a divorce, and ask what you need to send.
Ask for everything in writing, including the list of documents and the deadline, and write down the date, the name and what was said on every call. A verbal promise does not bind the servicer, and your notes can matter if a dispute follows. Keep paying whatever you can while the review is pending, and keep paying property taxes and homeowners insurance, since a lapse in either can create a new problem.
Step 2: Know the options
Swipe sideways to see the whole table.
| Option | What it does | Who it fits |
|---|---|---|
| Forbearance | Pauses or reduces payments for a limited time. You still owe the missed amount | A temporary hardship, such as a short layoff |
| Repayment plan | Adds part of the past-due amount to each monthly payment | Income has recovered and you can afford a higher payment for a while |
| Deferral or partial claim | Moves missed payments to the end of the loan or to a second lien paid when you sell or refinance | You can resume your regular payment but not pay extra |
| Loan modification | Changes the loan terms, adds missed payments to the balance and may lower the payment | You cannot afford your regular payment |
| Short sale or deed in lieu | Gives up the home without a foreclosure | You cannot keep the home |
Which options exist depends on who owns or insures the loan. FHA, VA and USDA loans have their own programs, and loans backed by Fannie Mae or Freddie Mac follow their own rules. Ask the servicer which options apply to your loan type and in what order it evaluates them. If you have an FHA loan, HUD describes its loss mitigation program on hud.gov. A servicer may also offer a short forbearance or repayment plan before a complete application, and it must tell you in writing what it is offering.
Before you accept, ask what it costs
Every option has a price, and servicers do not always volunteer it. Ask whether interest accrues on a deferred amount, whether a modification lengthens the loan or changes the rate, whether fees are added to the balance and how each option will be reported to the credit bureaus. Some deferrals and partial claims carry no interest and no payment until you sell or refinance, while others add to what you owe. Compare the total cost over the years you expect to stay, and not only the monthly payment.
Step 3: Understand the timing rules
Two federal timing rules in the mortgage servicing regulations are worth knowing. They are the reason that calling early matters.
- The 120-day rule. A servicer generally cannot make the first notice or filing for a foreclosure until you are more than 120 days delinquent. It also cannot do so while a complete loss mitigation application is pending, until it has finally denied the application and any appeal.
- The 37-day rule. If the servicer receives a complete application more than 37 days before a foreclosure sale, it must evaluate you for all available options, and it generally cannot move for a foreclosure judgment or order of sale, or conduct the sale, until it has done so under the rules. An application received 37 days or less before a sale does not get the same protections.
A complete application means every document the servicer asked for, so a missing pay stub can matter. After you submit, the servicer must acknowledge it in writing, and it generally has 30 days to evaluate a complete application. The rules have exceptions, and the CFPB has proposed changes to them, so check the current regulation or ask a housing counselor about your situation. Do not assume you have 120 days of safety, because other deadlines in your loan documents and in state law can run on their own clocks, and a servicer may begin the process in other ways once the 120 days pass.
Step 4: Get a counselor and avoid the scams
HUD-approved housing counseling agencies help homeowners for free or at low cost. Call 1-800-569-4287, which is HUD's line for finding an agency, or search at hud.gov/findacounselor. A counselor can help you gather documents, work out a budget and speak with your servicer. If you are in immediate danger of foreclosure, the Homeowners Hope Hotline at 1-888-995-4673 is open around the clock.
Be wary of anyone who contacts you offering to stop a foreclosure for a fee. HUD warns that for-profit foreclosure companies may charge a large fee for work a HUD-approved counselor does for free, and federal rules generally bar companies from charging before you have a written offer from your lender that you accept. Do not sign over the deed, stop paying your servicer or sign a document you do not understand.
If you are denied, or the foreclosure starts
Ask for the reason for any denial in writing and ask whether you can appeal. If a complete application arrived at least 90 days before a foreclosure sale, you generally have 14 days to appeal a denial of a loan modification, so keep the dates. A denial based on a missing document can often be fixed by supplying it.
If a foreclosure begins, you will receive court papers in a state that goes through the courts. Respond by the deadline, because a missed response can lead to a default judgment. Some states also offer foreclosure mediation or require the lender to give you a chance to catch up, so ask a counselor or a legal aid office what your state offers. The sale date is not the same as the date you must leave, and the timeline after a sale depends on state law.
State and local help
Your state housing finance agency or housing department may run a hardship program for homeowners, and some cities and counties fund counseling or emergency grants. Ask the counselor what is open now, since funds open and close, and check the agency's own website before you pay anyone for an application. Legal aid offices also help homeowners at no cost if your income is limited, and some courts run mediation programs that bring you and the servicer to the same table.
Step 5: If you cannot keep the home
Sometimes the numbers do not work. A short sale lets you sell for less than you owe with the lender's approval, and a deed in lieu transfers the home to the lender, and both can be better for your credit and your time than a foreclosure. Ask the servicer whether it forgives the remaining balance, and get it in writing, since a forgiven balance can sometimes create a tax bill that a tax preparer should review.
If you are a renter after the sale, our guide to eviction help explains your rights, and our guide to public housing explains one place to look for new housing. If the problem began with a job loss, see our job loss checklist.
Example (hypothetical): a borrower who calls early
A man is laid off in March and misses his April payment. He calls his servicer on April 5, explains the layoff and asks for a loss mitigation review. The servicer sends an application, and he sends pay stubs from his unemployment benefits and a hardship letter within two weeks. The servicer offers a six-month forbearance and, when he finds work, a deferral that moves the missed payments to the end of the loan. A foreclosure was never filed, and he did not pay anyone but his servicer.
Questions about falling behind
How late can I be before the servicer takes action?
A servicer can send letters and charge late fees soon after a missed payment, but federal rules generally bar a first foreclosure notice or filing until you are more than 120 days delinquent, with exceptions.
Does asking for help hurt my credit?
Asking itself does not. Missed payments do, and some options, such as forbearance, can be reported in ways that affect credit. Ask the servicer how it will report each option.
Can I stay in the home during foreclosure?
Usually until the sale and any state process that follows it. The timeline varies a lot by state, so ask a housing counselor or a legal aid office how long you are likely to have.
Should I stop paying the mortgage while I negotiate?
No. Paying what you can and keeping taxes and insurance current usually helps. Stopping on advice from a company that charges a fee is a common scam.
What decides your case
Your loan type, state law and the servicer's decisions control what is available, and the rules change. This is general information and not legal advice. A HUD-approved housing counselor or a legal aid attorney can review a notice or an offer before you accept it.
Official sources
Today
Find your servicer's number and your latest statement, write down the date of your last payment and call to ask for a loss mitigation review. Then call 1-800-569-4287 for a HUD-approved counselor and start gathering pay stubs, bank statements and a one-page hardship letter.
