Issues Paying Your Mortgage? This Is What You Can Do

It's Important to Act Quickly

When you've fallen behind on repaying your mortgage, it's time to act fast. Gain the best chance of holding on to your house, or of being able to sell it on your own terms, by reaching out to your lender or getting help.

Let's review the steps that will occur if you fall behind on your house payments and some details about where you can get help.

  • Communicate with Your Lender
  • Obtain Mortgage Assistance
  • Steps Your Lender May Take
  • Avoid Falling Deeper In Debt


Communicate with Your Lender

If you know that you'll be unable to make a mortgage payment, your first step should be to reach out to your lender. They should evaluate and respond to your request.

Explain to them:

  • Why you've missed a payment.
  • Your plan to catch up on the payments.
  • How they can help you get back on track.

If you think that your financial problems may be short-lived, and can be fixed in around three months, the lender may be able to change the terms of your loan to help you. You can request that they temporarily reduce the number of your payments, or delay your payments, as a hardship adjustment.

Obtain Mortgage Assistance

If you're dealing with mortgage issues in the U.S., the federal government has options available to assist you.

The Streamline Refinance Program may mean that you can refinance your current mortgage into a more affordable option. This is the program that replaced HARP.

You may also be able to work with the Home Affordable Modification Program (HAMP). This program can help lower the full amount of your monthly payment, making sure that your home loan can be paid off over time.

These programs are regularly enhanced and improved upon so that larger numbers of individuals can access federal assistance.

Additional Home Loan Assistance Can Include:

Collect on an Insurance Policy
If you carry accident or sickness insurance, or unemployment insurance, on your home loan, you may be able to put in a claim. Check out your paperwork or contact your insurer to determine if the policy you pay for covers the situation you are currently in.

Seek Help from Utility Companies
If you have an excessively high utility bill and it's causing you issues with paying your mortgage, reach out to your providers. Explain that you're having issues paying both your utilities and mortgage, discuss your financial difficulties, and see if they can negotiate a better repayment arrangement with you.

Speak with a Financial Advisor
If you aren't sure what you need to do next, or if you're having issues as you try to negotiate with your lender, you may be able to get free or inexpensive help from a financial counselor.

Obtain Legal Advice
If you're experiencing financial issues and can't pay your mortgage, consider seeking legal advice. Legal Aid provides free legal assistance throughout the country.


Steps Your Lender May Take

If you are behind on your mortgage payments, your lender will need to take specific actions before they can repossess your home. The steps may vary slightly from one state to another, but are basically the same. The earlier in the process you take action, the more likely it is that you'll be able to work out an agreement with the lender to save your home.

These steps are listed out below:

1. The lender will mail you a letter about missing a mortgage payment.
The first step should be for the lender to contact you, either by phone or with a letter.

2. The lender mails you a notice of default.
Often, a lender sends out a document notifying you that you are in default, which will give you a specific period of time to catch up on your missed mortgage payments and any other repayment that is due.

If you receive this notice, you may:

- Pay the amount you owe, along with any additional money that is due.

- Speak with your lender to find out if they're willing to reduce your payment or delay them, and get them confirmed in writing.

- Sell Your Home - especially if this will improve your financial situation. You'll need to talk to the lender about this decision and be ready to provide them with any documents they ask for to demonstrate that you're selling the property. This may include advertisements, a realtor agreement, or a copy of the contract for sale.

If you don't take these steps during the notice period, it's possible that your entire home loan will become due and payable immediately. The lender can begin taking action against you to possess the house and sell it themselves to repay the loan.

If your property is vacant, a plot of land, or rented, the lender may be able to acquire possession of it without going to court. This means that if you receive notice that you're in default, it's important to act fast.

3. The lender takes you to court.
If the period listed in the default notices passes, your lender may be able to serve you with court paperwork to obtain possession of your home so that they can sell it. This means you have a limited time to act, either by filing a motion to defend your situation or by going to court.

If you are served with papers, it's important to see legal advice immediately. Doing nothing can lead to your lender taking your home.

4. The lender can apply for a court order
If you haven't taken action after getting a notice of default or being served, the lender can then apply for a court order that will allow them to take possession of the house. If your lender has applied for this paperwork, you should contact an attorney.

5. The lender will send you a letter to move out.
Once the lender has a court order to take possession of the property, they will mail you a letter that instructs you to move out. An officer of the court will come and change the locks on the house. This can be called a Notice to Vacate or a Warrant for Possession.

If you have received this letter, contact an attorney.

6. The lender has you evicted.
At this point in the process, the lender can send an officer of the court to evict you and to change the locks. This allows them to sell the property.

If you are evicted, contact an attorney for legal advice.


Avoid Falling Deeper into Debt

If you have issues with your mortgage payments, some of these strategies could seem like good answers, but they are almost never a fix and may even worsen your situation.

Borrowing Money: If your existing loan is beyond what you can afford, you don't want to take out more debt, as you won't be able to afford those payments.

Borrowing from Friends or Family: This will add to your total debt load and you'll have the stress of owing money to people that you're close to. Consider the following when borrowing from someone you know.

Consolidating Your Debt: If you are considering this option, know about the risks and be careful of hidden fees. Learn more about managing debt here.

Switching Loans: Although switching home loans could save some money in the long run, it may take quite some time to make up the cost of switching.


It's important to act fast if you've fallen behind on your mortgage payments. Your first step should be to speak with your lender, and if they're considering legal action, to reach out to an attorney.