Foreclosure is a situation in which a homeowner is unable to make mortgage payments as required, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract.
Step One: Communicate With Your Lender
As soon as you realize that you are going to have trouble making your mortgage payments, contact your lender and tell them about your financial difficulties. This gives them the opportunity to work with you to create a plan. Do not stop paying your bills, and do not wait until you cannot make payments before you act. Though you may feel scared or embarrassed, immediately begin working with your lender to avoid foreclosure on your home. Learn more about how to talk to your lender about trouble making payments.
Step Two: Work With the MHA Program
You can get help through the Making Home Affordable (MHA) program, which provides free counselors for advice and assistance with keeping you in your home or getting out safely. Visit the MHA website to read about the options and what you’ll need to prepare.
MHA has a hotline you can call anytime: 1-888-995-HOPE (1-888-995-4673) and TTY users should call 1-877-304-9709. You can also find a counselor in your area.
Your state's housing agency might have a foreclosure avoidance program as well.
If you have an FHA loan, call the FHA National Servicing Center at 1-877-622-8525.
Beware of mortgage relief scams. One sign of a scam is when they ask for a fee in advance. Learn how to spot housing scams and report housing scams.
Scammers sometimes offer to "help" homeowners who are having trouble making their mortgage payments. Criminals like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee. But they’re just out to take your money, not help you.
These scam operators find potential victims in several ways:
- Advertising online and in local publications
- Distributing flyers
- Contacting people whose homes appear in the foreclosure notices in a local newspaper
- Targeting specific religious or ethnic groups
Report Foreclosure Scams
How to Protect Yourself
Get reliable foreclosure help and counseling through the government's Making Home Affordable program. Or find a government certified housing counselor near you. Read more about foreclosure scams and find numbers to call for help.
Be aware of these tricks that scammers use:
- Don’t send mortgage payments to any company that is not your loan servicer.
- Don’t sign any documents without having them reviewed by a lawyer or independent expert.
- Don’t stop making mortgage payments.
- Don’t forget that real help from the government is always free.
- Don’t give anyone your personal information, Social Security number, or bank information. Only share if you've confirmed their identity and that they represent a legitimate company.
- Don’t fall for rent-to-buy schemes or other mortgage fraud schemes.
After a foreclosure, you can begin taking steps to get yourself and your family moving forward to new housing and revitalizing your credit.
First, you may need to find temporary housing. The U.S. Department of Housing and Urban Development’s Office of Housing Counseling can connect you with local HUD-approved counselors. They can help you find immediate and longer-term housing options.
Your other immediate need is your children. If you’re staying in a new area, get them enrolled in school as soon as possible. And check your city or state department of social services if you need additional support such as SNAP benefits (food stamps).
Moving forward both financially and emotionally will take time. To help you organize those next steps, use
Refinancing your mortgage allows you to pay off your existing mortgage and take out a new mortgage on new terms. You may want to refinance your mortgage to take advantage of lower interest rates, to change your type of mortgage, or for other reasons.
These resources will help you learn more about refinancing your mortgage:
Making Home Affordable Program
- The Making Home Affordable Program offered opportunities to modify or refinance your mortgages, but as of December 30, 2016, no new requests for assistance under any MHA program will be accepted.
- However, the MHA program still offers free counseling and help for homeowners who are having difficulty communicating with mortgage companies or lenders about their needs for mortgage relief. Learn more about counseling or call 888-995-HOPE (4673).
- The Home Affordable Foreclosure Alternatives Program (HAFA) is an alternative solution for homeowners who are interested in a short sale or deed-in-lieu to avoid foreclosure.
Is there anything else I need to know?
Federal Reserve rules require mortgage companies to notify homeowners when their loans are transferred to another company. The company that takes over your loan must send you a notice within 30 days of acquiring it. Even with a new loan owner, the company that "services" or handles your loan might not change and you might continue to send your payments to the same address. If that loan servicer changes, you will receive a separate notice.
For more information about servicing companies, read the Federal Trade Commission's publication "Mortgage Servicing: Making Sure Your Payments Count."
Do you have a question?
Ask a real person any government-related question for free. They'll get you the answer or let you know where to find it.
Last Updated: November 4, 2019