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How to avoid foreclosure

If you’re having trouble paying your mortgage, take action today. Call your mortgage servicer — the company that receives your mortgage payments — and ask about your options.

  • Ask for help. There are relief options, like forbearance and repayment plans, that can help you stay in your home during short or long-term hardships.
  • Sell your home. Use the proceeds to pay off your mortgage, or — if you owe more than the home is worth — pay off part of your mortgage with a “short-sale.”
  • Mortgage Release™. Also known as a deed-in-lieu of foreclosure, this transfers property ownership to the mortgage owner and releases you from your payment responsibilities.

Even if the foreclosure process has started, there may still be ways to leave with less damage to your credit. The sooner you act, the better, so don’t wait.

Contact your mortgage servicer

The best way to prevent foreclosure is to talk to your mortgage servicer as soon as possible. Even if you already received a legal notice, your mortgage servicer may be able to help.

Your mortgage servicer will ask for:

  • Mortgage statements: Include documents for any other mortgages you may have.
  • Other monthly debt payments: Car loans, student loans, credit cards, etc.
  • Income details: Pay stubs and income tax returns.

You will need to explain why you’re having trouble making your mortgage payment and if you believe it is a short- or long-term problem.

You can prepare for the conversation with your mortgage servicer by contacting a HUD-approved housing counselor at no cost. Call 1-855-HERE2HELP (1-855-437-3243), or request an appointment.

Call your mortgage servicer to discuss your options. Remember: They want to help you avoid foreclosure because it’s time consuming and costly for them too.

Talk to a housing counselor at no cost

It’s never too early to ask for help. A housing counselor can help you prepare and support you when you reach out to your mortgage servicer.

Call 1-855-HERE2HELP (1-855-437-32431-855-437-3243), or request an appointment.

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Frequently asked questions

If a homeowner does not make required payments or violates the terms of their mortgage, foreclosure is the legal process where a mortgage company takes ownership of the home. The homeowner loses the home, and may lose the equity they have established.

The specific process and timing will vary. Generally, a mortgage company can prepare a default notice as early as 60 days after the first missed payment.

A judicial foreclosure is one that is supervised by a court and involves formal legal proceedings. The homeowner is served with a legal notice, and the court — or, in some cases, the sheriff — will approve the foreclosure date and sale. Foreclosures that are not court-supervised are considered nonjudicial.

Foreclosure can have long-lasting financial effects, including:

  • Limited mortgage access. You may have to wait at least seven years to get another mortgage.
  • Ongoing financial responsibility. You may still have to pay off the remaining amount due on your loan after the foreclosure sale.
  • Fewer options. You may no longer have access to resources that pre-foreclosure homeowners have, like relocation assistance and leasing opportunities.
  • Loss of home. You will lose your home and may lose the equity you have established.
  • Credit damage. There will be a negative impact to your credit, making it harder to qualify for loans, credit cards, and even future employment.

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