What to Do When You Fall Behind on Your Mortgage Payments

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Covid19 has made 2020 a very difficult year for many families. America is facing historic drops in the economy and record highs in unemployment. Understandably, keeping up with bills and monthly payments has been hard for many of us. One of the more stressful feelings is falling behind on your mortgage payments.

You Are Not Alone...

Last year 1 in 25 Americans were behind on their mortgage, and that was before the impact of Covid19. As of August 1st 2020, 32% Americans have missed 1 or more mortgage payments.  Needless to say that those numbers are increasing as we continue to navigate through these tough, pandemic times.

It can feel overwhelming if you fall behind on your home payments and other significant bills. However, failing to take action will definitely lead you and your home into foreclosure.  There are options available to you to prevent foreclosure on your house.  You must take action to prevent the foreclosure on your home.  Here are 5 different ways you can improve your situation and avoid losing your property in Houston.


Typically filing for bankruptcy is a last resort and should be your final option, but it’s still a choice available to you if necessary. Foreclosing is very costly, so lenders want to avoid foreclosure just as much as you do. Filing for bankruptcy is a good way to negotiate with multiple lenders at the same time.  Before filing bankruptcy, you should review your finances and make sure that your finances can meet the rigourous payment schedule that normally is created during the bankruptcy process.


Reaffirming your home is also an option on the table. If you’re in debt and file for bankruptcy, you can sign a reaffirmation agreement. Reaffirming allows you to keep your home, while stating that you will continue to make payments on your mortgage.


If your mortgage meets requirements, you may be eligible to take part in the Make Home Affordable program. Freddie Mac and Fannie Mae are both government sponsored mortgage loan companies, that are required to consider their financed loans for the MHA program. Any other lender chooses whether to participate in the program or not. MHA allows you to refinance into fixed rate loans, or possibly lower your mortgage payment based on your monthly income. The Make Home Affordable program incentivizes lenders into working on modifying mortgages for homeowners, so there’s a good chance your lender is a participant.


Like previously mentioned lenders want to avoid foreclosure if possible, as lenders lose out when loans go to foreclosure auction. So most lenders will offer some sort of assistance to homeowners. Talking with your bank could possibly result in a lowered interest rate or even a reduction in your monthly mortgage payment. Negotiating with your bank can be difficult and time consuming, but given these times, your bank might be willing to work with you. Explain the situation you’re in, offer all necessary paperwork, and prove to them that you are dedicated to staying in your home for years to come. Banks can be very forgiving if they are reassured that they will get back the money that they lent you. In some cases, the bank might be willing to add payments back on to the balance of your loan. Remind them that it’s more lucrative for them to work with you than it is to take a huge loss at auction.


If you are months behind on payments, and in a real pinch, you can always borrow money from a private investor. Borrowing from a private investor can either help you sell your house fast, or even help you retain your home. While there are many strict requirements that go into working with a bank or your lender, there may not be as many hoops to jump through when working with a private investor. The qualifications may not be as tight working with an investor either. Plus, the terms and agreements are set between you and the investor, offering more flexibility for you and your pockets. Working with a private investor might the best choice you can make to avoid foreclosure on your home.

Covid19 has caused many people, especially in Houston, to have trouble paying their mortgage every month. But don’t let these missed payments keep you behind. There are many different ways to handle catching up on back payments for your home. If you take the first step and act now, you can stop your home from going into foreclosure.