What Should You Do After Missing a Mortgage Payment?

Missing a mortgage payment can feel overwhelming, but one missed payment does not make foreclosure inevitable. Homeowners usually have several options, especially when they talk to their servicer early. Here is what to do first.

1. Call your servicer before they call you

Call the company listed on your mortgage statement — the servicer, which may not be the lender who originated the loan. Ask specifically for the loss mitigation or homeowner assistance department, not general customer service.

Servicers of most federally related mortgages are required to attempt contact within 36 days of a missed payment and to send written loss mitigation information within 45 days. Calling first puts you ahead of that clock and on the record as engaged.

2. Get your documentation together

Whatever option you end up pursuing, the servicer will ask for broadly the same package. Having it ready shortens everything:

• Recent pay stubs or proof of income

• The last two years of tax returns

• Recent bank statements

• A monthly budget of income and expenses

• A short written hardship explanation — what changed, when, and whether it is temporary or permanent

3. Know what your options are before the call

There are nine paths homeowners commonly have, from loan modification and repayment plans through to a sale that protects your equity. Which ones are realistically open to you depends on your income, your equity and how far along the process is.

Rather than repeat them here: read what to do when you are behind on payments, and see all nine homeowner options laid out side by side.

One thing worth knowing before you call: your deadlines are set by your state, not by your servicer. Reinstatement rights, redemption periods and deficiency exposure all change at the state line. Find your state here.

4. Find out where your equity actually stands

This is the step homeowners skip, and it is often the one that changes the answer. If the property is worth meaningfully more than the balance owed, a sale on your own terms is usually a far better outcome than anything the foreclosure process produces — and it is a real option that stays open only for a while.

If the property is worth less than the balance, that also matters, because it points toward a different set of options. Either way, you want the number before you make decisions, not after.

5. Keep records of every conversation

Write down the date, the time, the name of the person you spoke with, their ID or extension, and what they told you. Follow up important calls with a short email summarizing what was said, and keep the reply.

Servicing errors are common, transfers between servicers lose paperwork, and "we never received your application" is a sentence a lot of homeowners hear. A contemporaneous record is the cheapest protection you can give yourself, and it costs you nothing but a notebook.

6. Recognize foreclosure relief scams

A default notice is a public record, which is why the calls and letters start almost immediately after one is filed. Some of it is legitimate. A good deal of it is not.

Treat these as warning signs:

• An upfront fee to negotiate with your lender or to "guarantee" a modification

• A guarantee of any specific outcome — nobody can promise what a servicer will approve

• Being told to stop paying your servicer and pay them instead

• Being asked to sign over your deed, or to sign documents you have not read or do not understand

• Pressure to decide immediately, or discouragement from talking to a lawyer or a housing counselor

HUD-approved housing counseling is free, always. Find a counselor through the locator at hud.gov or by calling 800-569-4287. A counselor works for you — not for a lender and not for a brokerage.

7. Compare the options before you commit to one

The most expensive mistake is not choosing the wrong option. It is waiting so long that the good options close and only the worst one is left. Several of the paths above disappear permanently once a sale date passes.

If you would like a second set of eyes on the numbers, that is what a confidential review is for — what the property is worth, what you owe, what each path would actually net you, and how much time your state gives you to choose. It costs nothing and commits you to nothing.

A note on what this page is

This is general information, not legal advice, and not a prediction about your loan. Timelines and rights vary by state, by lender and by the specifics of your file. If you are facing foreclosure, a conversation with an attorney licensed in your state is time well spent.

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