If you're behind on your mortgage, immediately contact your lender and a HUD-approved housing counselor for free help to explore options like forbearance, a repayment plan, or a loan modification to make payments affordable, or if needed, discuss selling through a short sale or deed-in-lieu to avoid foreclosure, but beware of foreclosure scams asking for upfront fees.
If you are unable to make your mortgage payment:
Mortgage forbearance is a temporary pause or reduction in your monthly mortgage payment. These are typically short-term arrangements of 3 – 6 months. Your servicer may require you to show proof of financial hardship to qualify you for this option.
Yes, you can sometimes refinance while behind on payments, but it's difficult and depends heavily on the loan type, lender, how late you are, and your overall financial health, with government-backed loans (FHA, VA) and specialized programs offering more flexibility than traditional conventional loans, which usually require you to be current. Key factors are your payment history (even a few months can be a dealbreaker), credit score impact, loan-to-value ratio, and income, with loan modifications often being a better first step to get current before refinancing.
To qualify for mortgage forgiveness, you generally need to prove significant financial hardship (like job loss or reduced income), have your mortgage on a primary residence, and apply through your lender for options like loan modification, short sale, deed-in-lieu, or specific government programs (e.g., HAF), providing extensive financial documents to show your situation, though lenders rarely forgive debt outright, preferring other relief.
Under the CARES Act, borrowers are entitled to request an initial forbearance of their monthly mortgage payments for up to 180 days, and may request up to an additional 180 days. be paid back over time. Servicers should educate the borrower on what options will be available to the borrower to make repayments.
A repayment holiday can pause your principal and interest repayments for a period of time. Repayment holiday policies vary lender to lender, Eg. Some lenders may grant a repayment holiday for three months, with an option to review and extend to six months.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
If you lose your job, call your lender right away
You should contact your mortgage servicer as soon as you anticipate financial hardship, says Hala Garmo, regional mortgage manager for U.S. Bank. They can help you come up with a plan — after all, they have a financial incentive to keep you paying your mortgage.
A mortgage hardship is a significant, unexpected financial challenge, like job loss, disability, divorce, or major medical bills, that makes it difficult for a homeowner to make their monthly mortgage payments, prompting them to seek temporary relief options like forbearance or modification from their lender to avoid foreclosure.
A payment holiday is when you take a break from paying all or part of your monthly mortgage payment. They can help you with short-term or unexpected changes to your situation. These could be changes to your employment, maternity or paternity leave, household or car costs.
In most cases, you can be as far as 120 days — or four consecutive payments — behind on your mortgage before foreclosure on your home begins.
And there are important downsides to forbearance to consider, including more money due later and, in some cases, potential impacts to your credit. That said, if you're facing temporary hard times and if your lender offers the courtesy, mortgage forbearance could relieve some pressure and help you to avoid foreclosure.
From selling your home to working with your lender to modify your terms to renting out your home, there are legal ways to get out of your mortgage. Be sure to weigh the pros and cons of all your options, however. They could have long-term financial consequences for your credit and ability to buy another home.
If you are struggling to pay your mortgage, please contact your mortgage servicer immediately and ask about your options for avoiding foreclosure and how to apply. Do not ignore phone calls or mail from your servicer.
If you have trouble paying your mortgage, immediately contact your lender to discuss options like forbearance or repayment plans, seek help from a HUD-approved housing counselor for free guidance, and explore solutions such as loan modification, selling, or a short sale if staying isn't feasible, while carefully avoiding foreclosure scams. The earlier you act, the more options you'll have to avoid foreclosure and protect your credit.
A mortgage payment holiday gives you some flexibility in repaying your mortgage. It can allow you to stop or reduce your monthly payments for between 1 and 12 months.