Behind on your mortgage? Your options before a foreclosure sale

Being behind on your mortgage does not mean a foreclosure sale is your only option. Your servicer may offer a way to catch up or change your payments. If you can no longer afford the house, you can also sell before the sale date.

Start by finding out where your loan stands. One missed payment and a scheduled auction are different situations. Open every notice, write down the deadlines, and keep the envelopes with the letters. Timelines differ by state, so someone else's experience may not match yours.

Then ask yourself one plain question. Can you afford this home going forward? A short income gap needs a different plan than a payment that stays out of reach. Plan around what you can pay now, not income you hope will arrive.

Who should I call when I fall behind?

Call your mortgage servicer first. That is the company handling your payments, which may be different from the lender that made the loan. Use the number on your mortgage statement. Ask for the department that handles mortgage assistance or loss mitigation, the term used for foreclosure prevention options.

Explain what caused the missed payments and whether the problem is temporary. Have your income and expense figures ready. Ask how much is past due, whether foreclosure has started, and whether a sale date has been set. Request the assistance application and a clear list of documents needed to complete it.

Keep a record of each call and save everything you submit. Ask the servicer to confirm when your application is complete. CFPB guidance says to get a complete application to the servicer more than 37 days before a scheduled sale. Later applications may not have the same review protections, although other loan rules may apply.

If your sale is closer than that, call anyway and explain the date immediately. Ask what can still be reviewed and whether the sale has actually been postponed. Do not treat a phone call or an unfinished application as proof that the auction is on hold.

Would a repayment plan help me catch up?

A repayment plan spreads missed payments over an agreed period. You keep making your regular mortgage payment and add an amount toward the past-due balance. It may fit if your income has recovered and you can afford more each month for a while.

For example, imagine a regular payment of $1,500 and a past-due amount of $3,000. Spreading that amount over six months would add $500 each month, for a $2,000 payment. This is an example only. Your actual plan could include different amounts, fees, and terms.

Check that larger payment against your ordinary bills before accepting. Ask what happens if you miss a plan payment and how the account will be reported while you catch up. The servicer may still consider the loan delinquent until the missed payments are repaid. If the extra amount is too much, ask about another option.

Can a loan modification lower my payment?

A loan modification changes the terms of your existing mortgage. Depending on the offer, it may lower the interest rate or extend the repayment period. It is worth asking about when your regular payment is no longer affordable, even after the immediate hardship passes.

A lower payment needs a closer look. Ask what the new balance will be, how missed payments are handled, and when the loan will be paid off. Paying over more years can change the total cost. Compare the full written terms, rather than choosing only by the monthly amount.

Build your budget around the proposed payment and the other costs of owning the home. Leave room for repairs and changes in household expenses. If the new payment still requires you to borrow money for basic bills, tell the servicer. An approved change is only useful if you can keep making the payments.

Does forbearance erase the payments I missed?

Forbearance lets you temporarily pause payments or pay less under an arrangement with your servicer. It does not erase the debt. You still need a way to repay the paused or reduced amounts. It may help during a temporary hardship, such as a job loss or recovery from an illness.

Before agreeing, ask when the reduced payments begin and end. Find out whether interest keeps adding up and how the missed amounts will be repaid. Do not assume they automatically move to the end of the loan. The available arrangements depend on your mortgage and the terms offered.

Ask about the next step before the pause ends. A repayment plan, a payment deferral, or a modification may be available, depending on the loan. If your income has not recovered, contact the servicer before payments restart. A short break will not solve a lasting gap between your income and your housing costs.

Where can I get free help with these choices?

A HUD-approved housing counselor can help you understand foreclosure prevention options for free. You can call HUD at 800-569-4287 to find an agency near you. Although counseling appears here after the payment options, you can get help at the start. You do not need to sort everything out alone first.

Bring your mortgage statement, notices, and a realistic household budget. A counselor can go over your budget with you and explain what your servicer is offering. Tell them immediately if an auction date is already scheduled.

Be cautious if someone asks you to pay upfront to save the house or tells you to send mortgage payments somewhere else. Stick with your servicer and an approved counseling agency. Keep checking your deadlines and following up on your loan.

Can I sell my house before the foreclosure sale?

Selling may be an option if keeping the house is no longer affordable. Start with a written mortgage payoff amount for the expected closing date. Compare the likely sale proceeds with that payoff, other debts secured by the home, and selling expenses. Your statement balance alone is not enough to plan the sale.

Listing with an agent can be the better choice if you have enough time and equity, and the home can attract buyers at a price that leaves you more money. Ask the agent for an estimate of your proceeds and a realistic closing schedule. Judge the plan against the actual foreclosure deadline.

If the proceeds will fall short of what you owe, ask the servicer about a short sale. That requires lender approval to accept less than the mortgage balance. Get any agreement to waive the remaining debt in writing. A buyer's offer alone does not settle the unpaid amount.

A listing or signed purchase contract does not automatically stop foreclosure. Ask your servicer whether it will postpone the sale, and get confirmation. The closing must be coordinated so the mortgage is resolved before the foreclosure sale proceeds.

If time or repairs make listing difficult, you can compare an as-is cash offer from us with the agent's estimate. Look at what you would keep and whether the closing can meet your deadline. For homeowners weighing this route in Dallas County or Philadelphia County, these pages explain our local buying service.

Selling a house for cash in Dallas County

Selling a house for cash in Philadelphia County

What if I ask for a deed in lieu of foreclosure?

A deed in lieu of foreclosure is an agreement to transfer ownership of your home to the lender instead of going through foreclosure. It means giving up the house. Ask your servicer whether it is available if keeping the home or completing a sale is no longer workable.

Make sure the written agreement explains what happens to the entire mortgage debt. If the lender agrees to waive any remaining balance, get that waiver in writing and keep it. Do not assume handing over the property settles everything you owe.

Ask about the move-out date and whether relocation assistance is available. Forgiven debt can also have tax consequences. Ask a housing counselor to walk you through it before you decide. Compare it with selling, especially if a sale could leave you money for your move.

What happens if I do nothing?

Without a payment arrangement or another resolution, foreclosure can move toward a public sale of your home. Some states use a court process, while others allow foreclosure without a lawsuit. Neither one gives you extra time to ignore.

Late fees and other permitted costs may grow while the loan remains unpaid. Missed payments can damage your credit. Depending on state law and your circumstances, losing the home may still leave a debt if the sale does not cover what you owe.

Start today with the latest notice and a call to your servicer. Write down the next deadline and ask what you need to send. If a sale is scheduled, say the date at the start of every call.