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Ask a Counselor: I missed my last mortgage payment. What should I do?

Anne: It can be scary if you need to miss a mortgage payment. You might be worried about if, how, and when your lender could foreclose on your home. So, the first step is to take a deep breath! With a little effort, you can pursue all the options available to you to get back on track and stay in your home. 

Next, you’ll need to assess the situation. What caused you to miss the mortgage payment, and can you resume your payments immediately? If you’ve had a drastic change in your financial situation, you may qualify for a modified monthly mortgage payment that is more affordable for your budget. Or you may qualify for a period of forbearance (where your monthly payments are suspended or decreased for a specific amount of time). Due to the COVID-19 pandemic, federal law requires loan servicers to offer forbearance for federally backed home loans for up to 180 days if you’re experiencing a financial hardship. Talk to your loan servicer if you’re not sure what type of mortgage loan you have.

Then, take time to prepare an emergency budget so you know exactly how much you can afford to pay for your mortgage. An emergency budget can help you prioritize and reduce your expenses temporarily, so you can get through a financial crisis.

Once you have a good handle on when you can resume making payments, and how much you can afford, contact your lender, or loan servicer immediately. Explain your situation and be prepared to provide supporting documents, such as paystubs showing a reduction in hours or a car repair bill. Ask your lender to explain your options for a modified payment or a forbearance. Be sure to ask how long the modification or forbearance will last, if interest will accrue during this period, and when the missed mortgage payment will be due. 

Schedule a free appointment with a housing counselor, who can help you navigate mortgage assistance programs, conversations with your lender, and forbearance options. Please select Intake when signing up.

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