Falling behind is more common than people think, and there is more time and more help than most expect. Federal rules give you time before foreclosure can start, and a free housing counselor can walk you through your options.
Do these first
- Call your servicer, the company you send payments to, and ask about loss mitigation: the options to catch up, pause or change the loan.
- Call a HUD-approved housing counselor, free, at 800-569-4287. They can review your options and help with the paperwork.
- Open every letter from your servicer. Deadlines in them matter.
- Never pay anyone upfront to save your home. Charging fees before delivering a modification is generally illegal, and it is the mark of a foreclosure rescue scam.
What happens and when
- After a missed payment, a late fee usually applies once the grace period in your loan ends.
- By the 36th day, federal rules require your servicer to try to reach you, and by the 45th day to send a written notice of the options available.
- Before 120 days, the servicer generally can’t start foreclosure. If you send a complete application for help before then, foreclosure can’t begin while it is reviewed.
- After that, the process depends on the state. In California and Arizona foreclosures are usually handled outside court through a trustee sale; in Florida and Ohio they go through the courts, which usually takes longer.
Ways to keep your home
- Repayment plan: the missed amount is spread over several months on top of your payment.
- Forbearance: payments are paused or reduced for a time, then repaid or added to the loan.
- Loan modification: the loan’s terms change to make the payment affordable.
- Reinstatement: paying everything owed at once, with fees, to bring the loan current.
- FHA and VA loans have their own options, such as an FHA partial claim, which moves the missed amount into a separate loan repaid when you sell or refinance.
If you can’t keep it
Selling before a foreclosure protects your credit and keeps any equity. If you owe more than the home is worth, a short sale or a deed in lieu of foreclosure are the alternatives. Each affects your credit less than a completed foreclosure and shortens the wait before you can buy again (buying again after a foreclosure or short sale).
If you have equity, the sale proceeds calculator shows what you would walk away with. Call me before you list: if refinancing or a sale-and-buy plan can work, I’ll tell you, and if a counselor or your servicer is the better first call, I’ll say so.
Guides and calculators
Questions
I can’t pay my mortgage. What should I do?
Call your servicer and ask about loss mitigation, and call a free HUD-approved housing counselor at 800-569-4287. Do it early: the options are widest before you fall far behind.
How many missed payments before foreclosure?
Under federal rules, a servicer generally can’t start foreclosure until you are more than 120 days behind, about four missed payments. State law then sets how long the process takes.
Is there a way to get a house out of foreclosure?
Often, until the sale: bringing the loan current, a modification, a repayment plan or selling the home first. Some states also let you redeem the home for a time after the sale. A housing counselor can tell you what applies where you live. See also: Home sale proceeds calculator.
How long can you stay in a house after it forecloses?
It depends on the state. After the sale, the new owner usually has to give notice and go through an eviction, which takes weeks to months. Tenants have extra protections. See also: Home sale proceeds calculator.
What happens if I become disabled and can’t pay my mortgage?
Check for mortgage disability or payment protection insurance, then call your servicer about forbearance or a modification. A housing counselor can help you apply.
