Are You Behind on Mortgage Payments?  Here Are Some Options

Being behind on your mortgage payments is a scary place to be. The good news is that there are many programs out there to help. We’re here to help you find them.

We are living in times where many people are struggling to make their mortgage payments. The good news is that new government programs have been adopted. Because of some of these programs, lenders have become more willing to negotiate and work with you to try to keep you in your home.

If you are behind on your mortgage payments, check out the options listed below. Hopefully, you can find a solution that will allow you to stay in your home even though you are currently struggling with your mortgage.

Review Your Mortgage Payment Structure

The first step is to completely understand the present and future payments on your mortgage. This will be important as you consider ways to handle being behind on mortgage payments.

Some of your options depend upon the type of mortgage loan you initially signed. These are the three main type of mortgages:

  • Your payments could change at any point (Adjustable Rate Mortgage).
  • Your payments may have been fixed for a period but could change after a given date (Hybrid Adjustable Rate Mortgage).
  • Your Payments could be fixed for the life of the mortgage payment plan (Fixed Rate Mortgage).

Your payments on an Adjustable or Hybrid mortgage could increase, putting further stress on your finances and on you.

To avoid unfortunate surprises, you can consider refinancing to a Fixed Rate Mortgage. However, you have to consider the problems associated with this because there are additional costs.

Many ARM loans penalize the borrower for refinancing within the first few years of the mortgage, and it can mean paying out thousands of dollars.

However, if you plan to stay in the home for a long period of time, these additional costs can be worth it.

Prepare to Take Action

Before taking any action about your late mortgage payments, you need to have a good understanding of your current financial situation as well as what your future finances look like.

This article is a great place to start when you are having financial problems to determine how much financial trouble you are in.

Once you determine how much financial trouble you are in, you should consider the following:

  • How much is your property worth, and how much do you still owe on it?
  • Decide on your best-case resolution:
    • Do you want to keep your the home and the mortgage?
    • Do you want to live somewhere else and get rid of the mortgage?

Contact Your Mortgage Company ASAP

Once you understand your position, it is a good idea to get on the phone and start to deal with the situation as early as possible.

The best case is to contact your loan servicer before you get behind on mortgage payments. If you are current when you speak with them, there will be more options available to you.

Some people believe that telling their mortgage company that you are having financial problems just alerts them to watch you more closely. However, it is important to remember that it is in their bets interest to help you.

If you keep your home, you continue to make payments to them. If you give up your home, it could cost them money. Contact them as soon as possible.

Because of the depth of the financial crisis, many loan servicers have created more options for people who are behind on their mortgage payments. You need to find out what options may be available to you.

When you speak to your mortgage company, explain your situation and ask if they have any options that can help.

It is important to make them understand that you now have a firm grasp on your finances, and that with a little help or restructuring, you plan to continue making your mortgage payments and keep your home.

Standard Options When You Are Behind On Mortgage Payments

If you are behind on mortgage payments, there are several alternatives your loan servicer may suggest. They each influence your ability to retain your property, your credit rating, and your taxes, so carefully consider each option before taking any action.


Reinstatement is a clean and simple way to get on top of things if being behind on mortgage payments is temporary. It involves making an agreement as to when all of the past due amounts and fees are caught up.

Payment Plan

If you have missed a small number of payments, you may be eligible for a Payment Plan. This means that your mortgage lender allows you to pay back what you owe within a certain amount of time, adding a portion of the past due amount to your regular payments.


Another possible solution if your finances are being affected by a temporary situation is forbearance.

Forbearance means that you and your mortgage lender agree to suspend your payments for a period of time, after which you resume them and pay a lump sum or a series of partial payments until you are up to date with the payments.

Remember that this is only a solution if your problem is temporary.


If you believe that your difficulties will be long term, you could consider some form of loan modification.

Loan modification can take many forms:

  • Reduce the interest rate
  • Extend the length of the loan
  • Combine the missed payments into the remaining debt
  • Cancel part of the debt (this option will have to be reported on your taxes)

Hope for Homeowners Program

The Hope for Homeowners Program was created by Congress to help those at risk of defaulting or foreclosure. The program allows you to refinance your mortgage to a more affordable loan.

If both you and your lender agree to the conditions, it can give you a new 30-year fixed rate mortgage insured by the Federal Housing Administration.

Homeowners Affordable Stability Plan

The Homeowner Affordability and Stability Plan is a program created by the Obama administration which could help to make your monthly payments easier to cope with.

This program provides refinancing help for four to five million homeowners who have mortgages through Fannie Mae or Freddie Mac. The program creates new incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure.

Other Programs

You should also ask about your eligibility for the HAMP and the HAFA programs.

The Radical Approaches

Sell the Home

If you don’t need to keep the property, and the market allows it, you could consider selling your house. Under the right market conditions it could allow you to pay off your mortgage and settle the situation cleanly for a fresh start.


If you are unable to catch up your mortgage payments in any of the ways mentioned above, you may need to consider filing for bankruptcy.

This is a last resort because it has very far reaching effects on your credit rating, where it will remain for ten years, and can even affect your chance of getting certain jobs.

Learn more about the bankruptcy filing process here.

Here are some tips for finding a bankruptcy lawyer.

The Foreclosure Process

If none of the above advice can help, you may be faced with foreclosure. Here are some tips on how to prolong the foreclosure process as long as possible. Some things to keep in mind if you are facing foreclosure:

  • Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
  • Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, “return receipt requested,” so you can document what the servicer received. Keep copies of your letter and any enclosures.
  • Meet all deadlines the servicer gives you.
  • Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional “workout” assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

Getting Support When You Are Behind on Mortgage Payments

There is no reason for you to go through any part of this process on your own when you are behind on mortgage payments.

There are nonprofit organizations out there that specialize in assessing and advising people. They can explain anything you are unsure about and help to organize and prioritize your debt, often for free or for a small fee.

Your local office of the U.S. Department of Housing and Urban Development or your local housing authority can help you to find a trustworthy counseling agency.

You could also get in touch with the Homeownership Preservation Foundation, a nonprofit organization that works with mortgage companies, public institutions, and other organizations to help consumers get loan modifications and avoid foreclosures.

Don’t Get Scammed

Being behind on your mortgage payments can be a taxing time. Sadly there are people out there who are willing to take advantage of need, fear and confusion to make a quick buck by pretending to be non profit organizations.

Beware of people who ask for large sums of money up front and don’t trust promises or guarantees of loan reductions.

There are also companies who claim to offer services for people with mortgage difficulties. Many of these so called ‘services’ are carefully crafted schemes designed to take advantage of people in a vulnerable situation.

Listed below are some of the common scams compiled by the Federal Trade Commission, that are used on people who are behind on mortgage payments. Pay close attention so that you do not become a victim.

Common Scams Focused on People Who Are Behind on Mortgage Payments

  • The foreclosure prevention specialist: The “specialist” really is a phony counselor who charges high fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.
  • Some of these companies even use names with the word HOPE or HOPE NOW in them to confuse borrowers who are looking for assistance from the free 888-995-HOPE hotline.
  • The lease/buy back: Homeowners are deceived into signing over the deed to their home, to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.
  • The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.


Your home is obviously a very important piece of your life. Because of that, it is imperative that if you are behind on mortgage payments, you do your homework and take action immediately.

You need to combine some basic ground rules with the expertise of the organizations who are out there, to reach the best possible outcome.

Remember that there are many other people who are going through similar experiences and that much of the political world is focused on helping people manage the fallout from the current economic events.

There are many options available if you are behind on mortgage payments. Take the time to research and you just may find one that will keep you in your home and help your financial situation.

Leave a Reply

Your email address will not be published. Required fields are marked *

Convert Website to WordPress