If I can't pay my mortgage loan, what are my options? | Consumer Financial Protection Bureau (2024)

FAQs

What can you do if you can't pay your mortgage? ›

When forbearance ends, you may ask for an extension, modify your existing loan or refinance to a more affordable mortgage. Talk with your mortgage lender or servicer to discuss your options and choose the best one for your situation.

Forbearance is a process that can help if you're struggling to pay your mortgage. Your servicer or lender arranges for you to temporarily pause mortgage payments or make smaller payments. You still owe the full amount, and you pay back the difference later. Forbearance can help you deal with a financial hardship.

For homeowners facing tough times, it's possible to postpone monthly payments and still keep your house through a process known as deferment. Deferring your mortgage payments is not the same as entering into a forbearance plan, though the two options are sometimes incorrectly used interchangeably.

Your mortgage servicer or a HUD-approved Housing Counseling Agency can help at no cost to you.

Federal law usually requires a homeowner to be more than 120 days overdue before starting foreclosure, but earlier action can occur if there's no communication with the lender. It's important to discuss alternatives with your lender or a housing counselor to avoid foreclosure.

California law conforms, with modifications, to federal mortgage forgiveness debt relief for discharges that occurred in tax years 2007 through December 31, 2012.

How long does mortgage forbearance last? Mortgage forbearance is intended to provide relief while you're dealing with a short-term financial problem, so it generally does not last more than one year. Some lenders will ask you to provide them with updates during the forbearance period.

Forbearance is when you temporarily pause your monthly mortgage payments, whereas a deferment is one possible option for repaying past-due amounts when exiting forbearance. With a deferment, past-due monthly payments are set aside to be paid by the end of the loan.

You're eligible for this automatic deferment if you're enrolled at least half-time at an eligible college or career school. If you're a graduate or professional student who received a Direct PLUS Loan, you qualify for an additional six months of deferment after you cease to be enrolled at least half-time.

What is a hardship deferment? ›

A deferment is a way to postpone paying back your student loans for a certain period of time. The economic hardship deferment is available only if you have a federal student loan. You are eligible only if you are not in default on your loans and if you obtained the loans on or after July 1, 1993.

Borrowers must have a strong credit score to qualify for a skip-payment mortgage and they must otherwise be up to date on their mortgage payments. Borrowers should be aware that they will still owe the interest and principal that they would have paid in that month.

Talk to your lender about alternative arrangements

So, if the new payments are looking unmanageable, ask about ways to make them more affordable. Solutions could include: extending the term of your mortgage. taking a payment holiday.

If your mortgage is federally backed, you may be eligible for forbearance, which typically allows you to postpone payments for up to a year, and 18 months in some cases. 8 There are also additional options for mortgage relief, such as your state's Homeowner's Assistance Fund program.

Request a deed in lieu of foreclosure – A deed in lieu of foreclosure arrangement can help stave off financial hardship. Under its terms, you'll give your mortgage lender the deed to your home, releasing you from your mortgage responsibilities and avoiding having a foreclosure appear on your credit report.