Behind on Mortgage Payments? Know Your Options

The main options

• Call your servicer as soon as you can. Fannie Mae says the best way to prevent foreclosure is to talk to your mortgage servicer as soon as possible, and that the servicer may still be able to help even after a legal notice arrives. Fannie Mae: How to avoid foreclosure
• Ways some owners keep the home. Depending on the loan and the servicer, options to stay can include forbearance (a temporary pause or reduction in payments), a repayment plan (higher payments for a short period to catch up), payment deferral (missed payments moved to the end of the loan) or a loan modification (changed loan terms in writing). Freddie Mac My Home: Options to stay
• No option is guaranteed. Federal servicing rules require servicers to evaluate a complete application, but they do not require a servicer to give any borrower a specific loss mitigation option. What is available depends on the loan owner, the loan type and the owner's situation. 12 CFR 1024.41 (Regulation X), CFPB
• Selling when the home is worth more than the debt. If the home is worth more than the mortgage and other debts secured by it, the owner may be able to sell, use the proceeds to pay off the mortgage and keep what is left after costs. Freddie Mac My Home: Options to leave
• Deed in lieu of foreclosure. With a deed in lieu, the owner voluntarily transfers title to the mortgage company in exchange for canceling the mortgage debt. Freddie Mac describes it as generally for owners who have exhausted other options. Freddie Mac My Home: Options to leave

What your servicer has to do

• No foreclosure filing before 120 days late (most loans). Except in limited cases, a servicer cannot make the first notice or filing for foreclosure until the loan is more than 120 days delinquent. 12 CFR 1024.41 (Regulation X), CFPB
• Servicer contact by day 36. Servicers must make live contact, or good faith efforts to reach the borrower, no later than the 36th day of delinquency. 12 CFR 1024.39 (Regulation X), CFPB
• Written notice by day 45. By the 45th day of delinquency, the servicer must send a written notice that encourages the borrower to call, describes examples of options that may be available, and lists where to find HUD-approved housing counselors. 12 CFR 1024.39 (Regulation X), CFPB
• Five business days to say what is missing. If an application arrives 45 days or more before a foreclosure sale, the servicer must tell the borrower in writing within 5 business days whether it is complete or what is still needed. 12 CFR 1024.41 (Regulation X), CFPB
• Decision within 30 days. When a complete application arrives more than 37 days before a sale, the servicer must evaluate the borrower for all available options and send a written decision within 30 days. Consumer Financial Protection Bureau: What happens after I complete an application to determine my options to avoid foreclosure?
• No sale while a timely complete application is pending. If a complete application is received more than 37 days before a sale, the servicer generally cannot conduct the sale until the borrower is found ineligible (and any appeal is over), rejects all offers, or fails to perform under an agreement. 12 CFR 1024.41 (Regulation X), CFPB
• Appeal right for modification denials. If a complete application arrives 90 days or more before a sale, the borrower may appeal a denial of a loan modification, and the servicer must state the specific reasons for that denial. Consumer Financial Protection Bureau: What happens after I complete an application to determine my options to avoid foreclosure?
• Short sales count as loss mitigation. Federal rules list short sales and deeds in lieu among loss mitigation options, so a request for one with the information the servicer requires is a loss mitigation application. 12 CFR 1024.31 (Regulation X), CFPB
• A complaint does not stop a foreclosure. The CFPB forwards complaints to the company for a response, but says filing one will not automatically stop or delay a foreclosure. Consumer Financial Protection Bureau: Mortgage help

Short sales

• What a short sale is. A short sale is a sale of the home for less than what is owed on the mortgage. The CFPB calls it a type of loss mitigation and an alternative to foreclosure, and the owner has to move out because the home is sold. Consumer Financial Protection Bureau: What is a short sale?
• A short sale needs lender or servicer approval. A short sale works only if the lender or servicer agrees to it. Without that agreement, the sale cannot pay off the loan for less than the balance. Consumer Financial Protection Bureau: What is a short sale?
• Ask about the remaining balance in writing. The CFPB says that in some states the lender could sue for the shortfall after a short sale, so owners should ask the lender to waive the deficiency before going ahead and keep any waiver in writing. Consumer Financial Protection Bureau: What is a short sale?
• Relocation help may be available. Fannie Mae says relocation assistance may be available in some cases after a short sale or deed in lieu; eligibility and amounts depend on the program and servicer. Fannie Mae: Mortgage options to leave your home
• Short sale and future borrowing (Fannie Mae loans). Fannie Mae says a short sale causes less damage to a credit score than a foreclosure, and a new Fannie Mae mortgage may be possible in as little as two years after a short sale, compared with up to seven years after a foreclosure. Fannie Mae: Mortgage options to leave your home
• Listing the home does not by itself stop a foreclosure. Under federal servicing rules, the protection against a scheduled sale is tied to a complete loss mitigation application received more than 37 days before the sale, or to performing under an agreed option such as an approved short sale marketing period. Putting the home on the market without that does not by itself stop the process. 12 CFR 1024.41 (Regulation X), CFPB

How foreclosure works in Texas

• Texas: notice of default with at least 20 days to cure. For a home used as the debtor's residence, the servicer must send a notice of default by certified mail giving at least 20 days to cure before the notice of sale can be given. Texas Property Code ch. 51
• Texas: notice of sale at least 21 days before. Notice of a nonjudicial sale must be given at least 21 days before the sale by posting at the courthouse, filing with the county clerk and sending it by certified mail to each debtor. Texas Property Code ch. 51
• Texas: sales on the first Tuesday. Nonjudicial foreclosure sales are public auctions held between 10 a.m. and 4 p.m. on the first Tuesday of the month (the first Wednesday when that Tuesday is January 1 or July 4), in the area the county designates. Texas Property Code ch. 51
• Texas: notices are public. Counties must keep filed notices of sale available to the public and post them on the county website with the date, time and location of the sale. Texas Property Code ch. 51
• Harris County notice search. The Harris County Clerk's document search has a Foreclosures section where posted notices can be searched by sale date and file date. Harris County Clerk: Foreclosures document search
• Texas: active-duty military notice. Texas notices must tell the debtor to send written notice right away if the debtor or their spouse is on active military duty. For loans taken out before active duty began, state law adds foreclosure protections during active duty and for nine months after; a servicemember should ask a lawyer or military legal assistance office how they apply. Texas Property Code ch. 51; Property Code § 51.015
• Texas: deficiency claims after a nonjudicial sale. If a nonjudicial sale brings less than the debt, a suit for the shortfall must be brought within two years, and the borrower can ask the court to use the property's fair market value to reduce it. Texas Property Code ch. 51 (§ 51.003)

FHA, VA and other loan types

• Texas home equity loans need a court order. Under the Texas Constitution, a home equity loan (art. XVI, sec. 50(a)(6)) must be secured by a lien that can be foreclosed only by court order, and it is without personal liability except for actual fraud. Texas Constitution art. XVI, sec. 50
• FHA loans. FHA's loss mitigation program includes repayment plans, forbearance, partial claims, loan modifications and a payment supplement, and, for owners who cannot keep the home, a pre-foreclosure sale (short sale) or deed in lieu. HUD: FHA's Loss Mitigation Program
• FHA permanent options from February 2026. HUD announced permanent FHA loss mitigation options that servicers had to offer starting February 2, 2026, available regardless of the reason for the hardship. HUD news release 25-021 (Jan. 16, 2025)
• VA loans. VA lists options such as special forbearance, repayment plans, loan modifications and a VA partial claim, plus a short sale or deed in lieu, and says a short sale or deed in lieu could reduce future VA home loan benefit. VA: Trouble making payments on a VA home loan
• VA counseling for veterans. VA says it will provide counseling to veterans and surviving spouses even if the loan is not VA guaranteed, and assigns a loan technician when a VA-guaranteed loan is 61 days past due. VA: Trouble making payments on a VA home loan

Free and low-cost help

• HUD-approved foreclosure counseling is free. HUD says foreclosure counseling from HUD-participating agencies is always free; other counseling may carry a small fee, which agencies must waive if the client cannot afford it. HUD: About Housing Counseling
• How to find a counselor. Call HUD at 800-569-4287 or search online; the CFPB's ZIP code search also lists HUD-approved agencies. HUD: About Housing Counseling
• Texas Homeowner Assistance Fund is closed. TDHCA says the Texas Homeowner Assistance Program closed as of April 15, 2025 and is no longer assisting homeowners. TDHCA: Homeowner Assistance Fund (HAF) Program

Watch for foreclosure rescue scams

• Red flag: being told to stop paying. The CFPB lists telling you to stop making mortgage payments as a sign of a scam; doing that can hurt your credit and limit your options. Consumer Financial Protection Bureau: How to spot and avoid foreclosure relief scams
• Red flag: upfront fees. Companies offering mortgage relief generally cannot collect fees until the owner has a written offer from the lender and accepts it. FTC: Mortgage relief scams
• Red flag: signing over the deed. Scammers may push owners to transfer the deed to them; the FTC warns that a transferred deed is unlikely to come back, and transferring the deed does not transfer the mortgage. FTC consumer alert (Apr. 2024): Skip the scams as you look for options to avoid foreclosure
• Red flag: guarantees. The Texas Attorney General says not to believe anyone who claims they can stop a foreclosure for a fee, and to contact your lender or a HUD-approved housing counselor directly. Texas Attorney General: Mortgage Fraud
• Where to report. The FTC says to report suspected mortgage relief scams at ReportFraud.ftc.gov and to your state attorney general; in Texas, the Attorney General takes consumer complaints online. FTC: Mortgage relief scams

Taxes on forgiven debt

• Forgiven debt can be taxable. Canceled debt is generally taxable income, and a Form 1099-C means a creditor reported a cancellation to the IRS. Exclusions such as insolvency or bankruptcy may apply; owners should talk to a tax professional. IRS Topic 431: Canceled debt
• Home mortgage forgiveness exclusion ended. The IRS says the qualified principal residence exclusion covers debt discharged before January 1, 2026 or under a written arrangement entered before that date. IRS Topic 431: Canceled debt
• A foreclosure can be treated as a sale. For tax purposes a foreclosure is treated as a sale of the property, and a deed in lieu is treated as an exchange of the property to satisfy the debt; either can create gain or loss as well as canceled-debt income. IRS Publication 4681 explains the rules. IRS Publication 4681 (2025)

Facts checked Oct. 27, 2026. Each item links to its source. Rules change and depend on your loan; confirm them with your servicer, a counselor or an attorney.