Behind on your mortgage? Here's every way out, laid out plainly.
I'm Justin Liva, a New Jersey real estate investor since 2007. This site explains the ways out for homeowners anywhere in the US, including the options your lender offers, and the five ways I can buy a house when selling makes sense. I never charge homeowners anything.
Where are you right now?
Here's what usually happens at each stage, and which options are still realistic.
Pick the one closest to you. You'll see what usually happens next, and which options are still realistic.
- Day 1: a payment is missed
- Day 36: your servicer must try to reach you
- Day 45: a written notice of your options
- Day 120: the earliest first foreclosure filing, in most cases
- Then: your state's process, which sets the pace
- The sale
Choose one above to see what usually happens next.
Not behind yet, but worried
What usually happens next
- Nothing happens yet. This is the stage with the most options and the most time, so it's the best time to act.
- You don't have to pay anyone to help you avoid foreclosure. HUD-approved housing counseling agencies give foreclosure prevention counseling for free.
- If anyone tells you to stop making mortgage payments, they may be trying to scam you. Not paying can hurt your credit score and limit your options.
- If you pay late, you may be charged a late fee, though most mortgages include a grace period.
What's still realistic
With your lender
- Forbearance. Pauses or lowers payments for a while; you still owe the full amount.
- Loan modification. Changes the terms of your loan.
By selling
- Selling on the market. Usually better for your money and credit than foreclosure if the home is worth more than you owe.
- Any of my five ways. With time on your side, all five are open, including a novation.
1 to 2 months behind
What usually happens next
- Your servicer generally must try to contact you within the first 36 days after you fall behind.
- It generally must send you a written notice about options no later than 45 days after you fall behind, and be set up to give you a point of contact by then.
- Under federal rules, a servicer can't take the first legal step to foreclose until you're more than 120 days behind, except in a few cases.
- If you send a complete application for help before the foreclosure is first filed, the servicer can't file until it has told you that you don't qualify and any appeal is over, you turn down every offer, or you don't keep an agreement.
What's still realistic
With your lender
- Catching up or a repayment plan. Adds part of what you missed to your regular payment for a while.
- Forbearance. You pay back the paused amount later.
- Loan modification. May stretch the years, lower the rate, or put off part of the principal.
By selling
- Selling on the market. You don't need your servicer's approval to sell.
- Any of my five ways. All five are usually still realistic here.
3 to 5 months behind
What usually happens next
- Generally, the legal foreclosure process can't start until you're at least 120 days behind. At 4 or 5 months, you're at or past that line. Once it starts, how long you have until the sale depends on your state.
- If the servicer gets your complete application for help more than 37 days before a foreclosure sale, it must act on it within 30 days.
- If your complete application came in 90 days or more before a sale, you can appeal if you're denied a loan modification.
- See how your state handles the next steps in the state guides.
What's still realistic
With your lender
- Loan modification. If you get one and still can't make the payments, you may lose your home.
- Short sale. Selling for less than you owe, with your servicer's approval.
- Deed in lieu of foreclosure. You voluntarily give the home to the lender to avoid foreclosure.
By selling
- A cash offer. If the house is worth clearly more than the payoff.
- Taking over your payments. If there's little equity. Read the risks first.
- A novation. Only if there's enough time before any sale date.
6 months or more, or a sale date is set
If a sale date is set, time matters. Call a HUD-approved housing counselor today, and look at every option this week.
What usually happens next
- If foreclosure has already started but you send a complete application more than 37 days before the sale, the servicer can't ask the court for a foreclosure judgment or order of sale, or hold the sale, until certain conditions are met.
- If the servicer doesn't receive your complete application more than 37 days before the sale, it doesn't necessarily have to review it.
- Even while a complete application is being reviewed, a foreclosure case that was already filed can keep moving forward.
- In every state, you have the right to stay in your home during the whole foreclosure process.
What's still realistic
With your lender
- Deed in lieu of foreclosure. Make sure it covers the entire amount you still owe.
- Short sale. You're the one who has to find a buyer.
- Paying the full past-due amount. If the loan has been accelerated, the lender generally can require the full past-due amount.
By selling
- A cash offer. Often the fastest to close, if the numbers work.
- Taking over your payments. Can work with little equity, but read every risk.
- A short sale to me. If you owe more than the house is worth, I can be the buyer, with your servicer's approval.
Five ways I can buy your house
Most companies that buy houses make one cash offer. I can buy five ways, and I use whichever one makes the deal work for you.
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Cash offer
I buy the house outright, the loan is paid off at closing, and you move on.
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Taking over your payments
I buy the house and take over the existing mortgage payments; the loan itself stays in your name.
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Seller financing
You sell me the house and I pay you over time, with the terms written into a note we both sign.
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Lease option
I lease your house with the right to buy it later at a price we set now.
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Novation
We agree on your price, I fix up and market the house, and it sells on the open market.
Little or no equity?
If you owe close to what the house is worth, a cash offer usually can't cover the loan. Other ways still can. See how, with a worked example.
Want me to look at your situation?
Tell me about the house and where things stand. I'll look at the ways I could buy it, and we can talk through how they compare with your other options. I never charge homeowners anything.