Options If You Become Delinquent on Your Mortgage Payments

We have listed a few options below that may be helpful to help get you back on track if you get behind on paying your monthly mortgage.  The best thing to do is to talk to your lender or a HUD-approved counseling agency for details as the market conditions are constantly changing.


  • Keep living in your home to qualify for assistance.  DON’T vacate the property.
    • Contact a HUD-approved housing counseling agency (1-800-569-4287) and cooperate with the counselor/lender trying to help you.
    • Your lender can provide you with the details on qualifying for the above options.  If you are having difficulty communicating with your lender, call the FHA Loss Mitigation Center at 1888-297-8685 for additional help.
    • HUD has a number of special loss mitigation programs available to help you:
      • Special Forbearance:  Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments.  You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses.  You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.
      • Mortgage Modification:  You may be able to refinance the debt and/or extend the term of your mortgage loan.  This may help you catch up by reducing the monthly payments to a more affordable level.  You may qualify if you have recovered from a financial problem and can afford the new payment amount.
      • Partial Claim:  Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.
      • Pre-Foreclosure Sale:  This will allow you to sell your property for an amount less than the amount necessary to pay off your mortgage loan and to avoid foreclosure.
      • Deed-in-lieu of Foreclosure.  As a last resort, you may be able to voluntarily “give back” your property to the lender.  This won’t save your house, but it is not as damaging to your credit rating as a foreclosure.


Talk to your lender about specific loss mitigation options.  Work directly with them to request a “workout packet.”  A secondary lender, like Fannie Mae or Freddie Mac, may have purchased your loan.  Your lender can follow the appropriate guidelines set by Fannie or Freddie to determine the best option for your situation.

    • Fannie Mae does not deal directly with the borrower.  They work with the lender to determine the loss mitigation program that best fits your needs.
    • Freddie Mac, Like Fannie Mae, will usually only work with the loan servicer.  However, if you encounter problems with your lender during the loss mitigation process, you can call customer service for help at 1-800-FREDDIE (1-800-373-3343).

In any loss mitigation situation, it is important to remember a few helpful hints:

  • Don’t sign anything you don’t understand.
    • Explore every reasonable alternative to avoid losing your home, but beware of scams.  For example, watch out for:
      • Equity skimming – a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out
      • Phony counseling agencies – offer counseling for a fee when it is often given at no charge through legitimate agencies

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