Foreclosure on Your Home

Foreclosure typically begins after a borrower misses several mortgage payments, often around 120 days delinquent for federally related loans, though timelines vary by servicer and loan type. Many states use a judicial foreclosure process that goes through the courts, while others allow non-judicial foreclosure under a power-of-sale clause in the mortgage or deed of trust.

Before foreclosure, mortgage servicers are generally required to send notices about missed payments and available options, and federal servicing rules require most servicers to consider loss-mitigation options before proceeding, if the borrower submits a complete application in time.

Losing a home is one of the most significant financial and emotional events a household can face. A completed foreclosure can also significantly affect your credit and, depending on state law, may expose you to a deficiency judgment if the home sells for less than what is owed.

The earlier you engage with your mortgage servicer, the more options are usually available. Waiting until shortly before a scheduled sale date narrows your choices considerably.

• Loan modification, which changes the terms of the mortgage to make payments more affordable.
• Repayment plan or forbearance, which can address a temporary hardship over a set period.
• Short sale or deed in lieu of foreclosure, which may reduce damage compared with a completed foreclosure.
• Chapter 13 bankruptcy, which can allow past-due mortgage amounts to be repaid over time while you keep the home, subject to court approval.
• Selling the home before foreclosure completes, if there is enough equity and time.
• Working with a HUD-approved housing counselor, often at no cost, to review options with your servicer.

Contact your mortgage servicer as soon as you know you may miss a payment, and ask about loss-mitigation options in writing. Consider a free session with a HUD-approved housing counselor, who can help you understand your options and communicate with your servicer. Keep copies of all correspondence and note every deadline mentioned in foreclosure notices.