Missing your mortgage payments? Worried about foreclosure, wondering what it is and how to prevent it from happening to you?

We asked the U.S. Department of Housing and Urban Development for advice so …

We know: How to Avoid Foreclosure

What is foreclosure?

Foreclosure is the legal means that enables your lender (who holds your mortgage) to repossess or take back your house.

When do lenders foreclose?

When you stop making your mortgage payments. Once you do, you’ll begin receiving letters from you lender stating that you have missed one or more payments.

Are there things I can do to avoid foreclosure?

Definitely.

Respond to your lender’s letters immediately by calling or writing to the lender’s Loss Mitigation Department. Explain your situation. Be prepared to provide financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
Stay in your home for now. You may not qualify for assistance if you abandon your property.
Contact a counseling agency approved by the government’s Housing and Urban Development Department. These agencies often have information on services and programs offered by Government agencies as well as private and community organizations that could help you. Their services are usually free of charge.

What can be done to help me avoid foreclosure?

Depending on the kind of mortgage you have, and your situation, you may be eligible for:

Special Forbearance. Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments.
Mortgage Modification. You may be able to refinance the debt and/or extend the term of your mortgage loan.
Partial Claim. Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.
Pre-foreclosure sale. You could avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan.
Deed-in-lieu of foreclosure. This enables you to voluntarily "give back" your property to the lender. This won't save your house, but it is not as damaging to your credit rating as a foreclosure.