Protecting your financial future: How to avoid mortgage foreclosure
Falling behind on a mortgage is scary. It can feel like one wrong move will cost you your home. The truth is that foreclosure usually takes time. What you do in those early weeks often decides whether you can save the house.
Talk to Your Mortgage Servicer Quickly
The Consumer Financial Protection Bureau says to call your mortgage servicer as soon as you think a payment might be late. When you call, explain the hardship in simple terms and ask, “What options do you have for someone in my situation and with my loan type?”
Apply for a Loss Mitigation Option
After that first call, ask the servicer to start a loss mitigation review. This review looks at tools that limit loss for both sides, such as a repayment plan that spreads what you owe over several months, short-term forbearance where payments are paused or reduced, or a loan modification that changes the interest rate, term, or payment amount. They will ask for pay stubs, bank statements, and a list of expenses, so gather those early.
Use Free Help from HUD Approved Counselors
You do not have to do this alone. HUD approved housing counselors work with homeowners every day. They can walk you through letters, help you fill out forms, and go over your budget in normal language.
Protect Housing Costs in Your Budget
Any agreement is useless if the new payment does not fit your real budget. Write down every source of income and every regular bill. Then sort bills into needs and wants. Housing, basic utilities, food, and transportation to work go in the “need” column. Streaming services, eating out, and impulse shopping belong in the “want” column. Cutting a few wants for a season can free up money that keeps a roof over your head.
Check for Government and Local Help
Some states and cities have programs that help homeowners who fell behind because of job loss, illness, or another hardship. Money from the federal Homeowner Assistance Fund is often handled by state housing agencies. In some cases, it can cover part of your missed payments, property taxes, or utilities. A housing counselor, legal aid office, or state housing website can show you what is open and how to apply.
Watch Out for Foreclosure Rescue Scams
When people feel desperate, scammers move in. The Federal Trade Commission warns homeowners to be careful with anyone who promises to “guarantee” a result, wants large up-front fees, or tells you to stop talking to your servicer. Never sign over the deed to your home just because someone claims they will fix the problem. Once your name is off the deed, getting it back can be very hard.
Know When to Talk to a Lawyer
If you receive formal foreclosure papers, strict deadlines may apply. For example, in Maryland, you have just 25 days from the notification of foreclosure to seek mediation. At that point you may need advice from a lawyer in your state who handles foreclosure or consumer law. They can explain the timeline where you live and whether you still have time to save the home.
This article gives general information, not legal advice. Acting early, keeping notes on every contact with your servicer, and reaching out for help from a HUD approved counselor or a local attorney can all help you protect both your home and your long-term financial health.