The numbers are staggering. Over 6.1 million Americans are currently behind on their mortgage payments, representing the highest level in over 20 years. If you're reading this because you're struggling to make your mortgage payment, you are heading the right way.
More importantly, you're not out of options.
As the owner of ASAP Credit Repair with nearly two decades helping homeowners navigate financial crises, I've guided thousands through mortgage difficulties. The key is acting quickly and understanding your options before it's too late.
Here's exactly what to do if you cannot pay your mortgage, based on real strategies that have saved my clients' homes.
The Reality of Mortgage Payment Problems Today
The current mortgage crisis isn't just affecting people who bought homes they couldn't afford. With average mortgage debt reaching $252,505 in 2025 and inflation hitting household budgets hard, even responsible homeowners are struggling.
Job losses, medical emergencies, divorce, and economic uncertainty have created a perfect storm. Many of my recent clients were current on their payments just months ago. Economic conditions can change anyone's situation quickly.
The good news? Lenders don't want your house.
Foreclosure costs them an average of $50,000-70,000 per property, plus months of lost revenue. They're motivated to work with you - if you approach them correctly.
What NOT to Do When You Can't Pay Your Mortgage
Before diving into solutions, let me tell you the biggest mistakes I see homeowners make when they can't pay their mortgage:
Don't ignore the problem. Hiding from your lender only makes things worse. The earlier you communicate, the more options you'll have.
Don't assume you'll lose your house immediately. Foreclosure is a lengthy legal process that takes months or even years in some states. You have time to explore solutions.
Don't fall for scam companies promising to "stop foreclosure overnight" for upfront fees. Legitimate assistance doesn't require large upfront payments.
Don't drain your retirement accounts to make mortgage payments without exploring other options first. There are better solutions that don't destroy your long-term financial security.
My client Robert made this exact mistake - he cashed out his 401(k) to catch up on mortgage payments, paying massive penalties and taxes, only to fall behind again three months later when he lost his job permanently.
Contact Your Lender Immediately
The moment you realize you cannot pay your mortgage, contact your lender's loss mitigation department. Don't wait until you've missed payments. Many lenders offer assistance to homeowners before they become delinquent.
What to say: "I'm experiencing financial hardship and may have difficulty making my upcoming mortgage payments. I'd like to explore my options to avoid foreclosure."
What to have ready:
- Your loan number and account information
- Documentation of your financial hardship (job loss letter, medical bills, etc.)
- Current income information
- Monthly expense breakdown
- Bank statements from the last two months
From my experience: Lenders are most cooperative when you're proactive rather than reactive. Clients who call before missing payments get better assistance than those who wait until they're months behind.
Mortgage Assistance Options That Actually Work
Loan Modification Programs
Loan modifications permanently change your mortgage terms to make payments more affordable. This might involve:
- Reducing your interest rate
- Extending the loan term
- Adding missed payments to the loan balance
- In rare cases, reducing the principal amount
Success story: My client Maria was three months behind on her $2,400 monthly payment after her hours were cut at work. We worked with her lender to modify her loan, reducing her payment to $1,850 and adding the missed payments to her loan balance. She's been current for over two years now.
Forbearance Agreements
Forbearance allows you to temporarily reduce or pause mortgage payments while you get back on your feet. Unlike loan modifications, forbearance is temporary - typically 3-12 months.
How it works: You and your lender agree to reduced payments or payment suspension for a specific period. At the end, you'll need a plan to catch up on missed amounts.
Important: Get forbearance agreements in writing and understand exactly how you'll handle the missed payments when the forbearance period ends.
Repayment Plans
If you've missed payments but your financial situation has improved, repayment plans let you catch up gradually by adding a portion of the missed amount to your regular monthly payment.
Example: You're $4,800 behind (two months at $2,400/month). A repayment plan might add $400 to your regular payment for 12 months to catch up.
Government Programs for Mortgage Help
Several government programs provide mortgage assistance, especially if you qualify for specific circumstances:
VA Loan Assistance: If you have a VA loan, contact your servicer about VA loss mitigation options. The VA has specific programs to help veterans avoid foreclosure.
FHA Loss Mitigation: FHA loans have special modification programs and partial claim options that can help bring your loan current.
USDA Rural Development: If you have a USDA loan, they offer payment assistance and loan servicing options specifically for rural homeowners.
State and Local Programs: Many states offer mortgage assistance programs funded by federal grants. Search "[Your State] mortgage assistance program" to find local resources.
When Bankruptcy Might Save Your Home
Bankruptcy isn't always about losing everything - sometimes it's about keeping your home. Chapter 13 bankruptcy can actually stop foreclosure and give you 3-5 years to catch up on missed payments.
How Chapter 13 works for mortgages:
- Automatically stops foreclosure proceedings
- Allows you to catch up on missed payments over 3-5 years
- Keeps you in your home while reorganizing your debts
- Can strip second mortgages in some situations
Real example: My client David was six months behind on his mortgage with foreclosure scheduled in 30 days. Chapter 13 bankruptcy stopped the foreclosure immediately and gave him five years to catch up on the $14,400 in missed payments at about $240 per month extra.
Important consideration: Bankruptcy affects your credit for years and should only be considered after exploring other options with qualified legal counsel.
Recommended Read: Build Your Credit After Bankruptcy
Selling Your Home: Exit Strategies That Protect Your Credit
Sometimes keeping your home isn't financially realistic. If that's your situation, there are ways to sell that protect your credit and financial future.
Traditional Sale
If your home is worth more than you owe, selling it might be your best option. Even if you break even, walking away debt-free is better than foreclosure.
Timeline considerations: Listing and selling can take 2-6 months depending on your market. Make sure you have enough time before foreclosure proceedings advance too far.
Short Sale Process
If you owe more than your home is worth, a short sale allows you to sell for less than the mortgage balance with your lender's approval.
Short sale benefits:
- Avoids foreclosure on your credit report
- May qualify you for new financing sooner
- Eliminates ongoing mortgage payments and maintenance costs
- Provides more control over the timeline than foreclosure
Short sale challenges:
- Requires lender approval for the sale price
- Can take 3-6 months to complete
- May have tax implications for forgiven debt
- Not all lenders accept short sale offers
Deed in Lieu of Foreclosure
This involves voluntarily transferring your home's ownership to the lender instead of going through foreclosure proceedings.
When this makes sense: If you cannot sell the home and cannot afford to keep it, deed in lieu can be faster and less damaging to your credit than foreclosure.
Protecting Yourself from Mortgage Scams
When homeowners are desperate, scammers appear with promises that sound too good to be true. Here are red flags to avoid:
Upfront fee demands: Legitimate mortgage assistance doesn't require large upfront payments. HUD-approved counselors provide free assistance.
Guarantees to stop foreclosure: No one can guarantee to stop foreclosure without knowing your specific situation and lender.
Pressure to sign over your deed: Never sign documents transferring ownership of your home to someone promising to "save" it.
Requests to make payments to them instead of your lender: This is often a scam where they collect your money but don't pay your lender.
From my 19 years of experience: If someone approaches you unsolicited with foreclosure help, be extremely cautious. Legitimate help comes from HUD-approved counselors, attorneys, and established companies with verifiable track records.
Creating a Sustainable Budget After Mortgage Problems
Once you've addressed the immediate mortgage crisis, creating a sustainable budget prevents future problems.
The 50/30/20 rule adapted for homeowners:
- 50% for needs (including mortgage, utilities, food)
- 30% for wants (entertainment, dining out, hobbies)
- 20% for savings and extra debt payments
Mortgage-specific budgeting: Your total housing costs (mortgage, taxes, insurance, maintenance) shouldn't exceed 35% of your gross income. If they do, you may need to consider downsizing.
Emergency fund priority: Build at least $2,000-3,000 in emergency savings specifically for home repairs and maintenance. This prevents future financial surprises from derailing your mortgage payments.
Legal Protections and Your Rights
As a homeowner facing mortgage difficulties, you have specific legal rights:
Right to loss mitigation review: Under federal law, your servicer must review you for all available loss mitigation options before proceeding with foreclosure.
Right to appeal: If your modification application is denied, you have the right to appeal the decision and request specific reasons for the denial.
Right to accurate information: Your servicer must provide accurate payoff amounts, payment histories, and account information when requested.
Dual tracking prohibition: Servicers cannot proceed with foreclosure while your modification application is being reviewed.
State-specific protections: Many states require mediation programs or additional notice periods before foreclosure can proceed.
When to Seek Professional Help
Consider professional assistance if:
- Your lender isn't responding to your requests for help
- You're confused about your options or the documents you're receiving
- Foreclosure proceedings have already started
- You're considering bankruptcy as an option
- You need help negotiating with your lender
Types of professional help:
- HUD-approved housing counselors (free)
- Real estate attorneys specializing in foreclosure defense
- Qualified credit counselors
- Experienced real estate agents for selling options
Timeline: How Long You Actually Have
Understanding foreclosure timelines reduces panic and helps you plan effectively:
Judicial foreclosure states (requires court proceedings):
- 90-120 days: Initial notices and default period
- 120-180 days: Court filing and legal proceedings
- 180-365 days: Court judgment and sale scheduling
- Total timeline: 12-24 months typically
Non-judicial foreclosure states (faster process):
- 30-90 days: Notice of default period
- 90-120 days: Notice of sale period
- 120-150 days: Auction and completion
- Total timeline: 4-6 months typically
Key point: Even in fast-moving states, you have months to explore options. Don't panic, but do act quickly.
Success Stories: Real Homeowners Who Saved Their Homes
Case 1 - The Johnson Family: Lost $40,000 in annual income when the husband was laid off. We negotiated a loan modification that reduced their payment from $2,800 to $2,200 and lowered their interest rate. They've been current for three years.
Case 2 - Single Mother Sarah: Facing foreclosure as a single mom with two kids. Short sale allowed her to move to affordable rental housing without foreclosure on her credit. She qualified for a new mortgage just two years later.
Case 3 - Veteran Mike: VA loss mitigation program provided payment assistance for six months while he recovered from surgery. The VA also helped negotiate a permanent rate reduction.
These aren't unique success stories - they represent the outcomes possible when homeowners take action early and explore all available options.
Your Action Plan If You Cannot Pay Your Mortgage
Week 1:
- Contact your lender's loss mitigation department
- Gather all financial documentation
- Research your state's foreclosure timeline and protections
Week 2:
- Submit hardship application to your lender
- Contact a HUD-approved housing counselor for free assistance
- Explore government assistance programs you might qualify for
Week 3-4:
- Follow up on your application status
- Consider professional legal assistance if needed
- If keeping the home isn't viable, explore selling options
Ongoing:
- Maintain communication with your lender
- Document all interactions in writing
- Stay current on any agreed-upon payments
The Bottom Line: You Have More Options Than You Think
The current mortgage crisis affects millions of Americans, but foreclosure isn't inevitable. With 6.1 million Americans currently behind on mortgage payments, lenders are motivated to work with homeowners to find solutions.
The key is acting quickly, understanding your options, and communicating proactively with your lender. Whether through loan modification, government assistance, or strategic exit planning, there are paths forward that protect your financial future.
After nearly two decades helping homeowners through mortgage crises, I can tell you that those who take action early almost always have better outcomes than those who wait. Don't let fear or embarrassment prevent you from exploring your options.
Your current mortgage situation is temporary. The decisions you make now will determine whether this crisis becomes a minor setback or a major financial disaster. Choose action over avoidance, and you'll likely be surprised by how many solutions are available.
This information is educational and not legal or financial advice. Consult qualified professionals for your specific situation.