What to Do If You’re at Risk of Losing Your Home

Updated

If you are at risk of losing your home, act early: contact your loan servicer before you miss a payment, ask specifically about repayment plans or loan modifications, and get free help from a U.S. Department of Housing and Urban Development (HUD)–approved housing counselor. The steps below apply to most mortgage borrowers in the United States who are facing delinquency or foreclosure; the exact options depend on your loan type, how far behind you are, and your servicer’s requirements.

Start by calling your loan servicer

Your servicer is the company that collects your mortgage payment, and it is the first place to ask about ways to avoid foreclosure. Call the number on your monthly statement or in your online account.

When you call, be ready to explain:

  • Why you fell behind or expect to fall behind (job loss, medical bills, reduced hours).
  • Your current income and monthly expenses.
  • How much you can realistically pay each month going forward.

Ask directly: “What loss mitigation options do you offer, and what do I need to submit to apply?” Servicers commonly review borrowers for:

Option What it generally does
Repayment plan Spreads the past-due amount over several months on top of your regular payment
Forbearance Temporarily reduces or pauses payments, with a plan to catch up later
Loan modification Permanently changes one or more loan terms, such as the interest rate or length
Partial claim or similar program Provides a separate loan to cover missed payments (availability depends on loan type)

Do not stop paying without talking to the servicer first. Unanswered calls and unopened letters are the fastest way to move toward foreclosure.

Know the timeline you are working with

Foreclosure is a process with defined stages, and each stage gives you a chance to act. Rules vary by state and by the type of mortgage, but the general sequence is:

  1. Missed payments. You fall behind, and the servicer sends notices.
  2. Demand or acceleration letter. The servicer formally states the amount owed and a deadline.
  3. Notice of default or notice of sale. A public filing or scheduled sale date appears.
  4. Foreclosure sale. The home is sold at auction.

The earlier you are in this list, the more options you usually have. Once a sale date is set, options narrow sharply, so treat any notice with a deadline as urgent.

Get free, HUD-approved housing counseling

A HUD-approved housing counselor can review your budget, explain your options in plain language, and in many cases contact your servicer with you. This help is generally free.

To find one:

  • Visit the HUD website and use its counselor search, or call the HUD housing counseling line.
  • Ask whether the agency offers foreclosure prevention counseling and whether it serves your area.
  • Bring your mortgage statement, recent pay stubs, bank statements, and any letters from the servicer.

Be cautious about anyone who charges an upfront fee to “save” your home, asks you to sign over the deed, or tells you to stop talking to your servicer. Legitimate counseling does not require you to give up ownership.

Apply for help in writing and keep records

A phone call is a start, but most servicers require a written application. Keep a simple file with:

  • The date of every call and the name of the person you spoke with.
  • Copies of everything you submit.
  • A log of what the servicer promised and when.

If your application is denied, ask for the reason in writing and whether you can appeal. If you are approved for a trial modification, make every trial payment on time — missing one can cancel the agreement.

If you cannot keep the home

Sometimes the realistic goal shifts from keeping the home to avoiding a damaging foreclosure. Ask your servicer or counselor about:

  • Short sale — selling for less than you owe, with the servicer’s approval.
  • Deed in lieu of foreclosure — voluntarily transferring the home to the lender.
  • Assistance for moving costs — some programs provide relocation help.

These options still affect your credit, but they are often less damaging than a completed foreclosure.

Common mistakes to avoid

  • Waiting until the sale date to call. Options shrink as the deadline approaches.
  • Ignoring mail from the servicer or the courts.
  • Paying a third party upfront to “negotiate” when free HUD-approved counseling exists.
  • Assuming you must be completely current to qualify for help — many programs are designed for borrowers who are already behind.

Quick checklist

  • [ ] Call your servicer and ask about loss mitigation options.
  • [ ] Gather income, expense, and mortgage documents.
  • [ ] Contact a HUD-approved housing counselor.
  • [ ] Submit a written application and keep copies.
  • [ ] Track every deadline in writing.
  • [ ] Make any approved trial payments on time.

The single most useful action is the earliest one: a phone call to your servicer and a call to a HUD-approved counselor, before a sale date is set.