If you’ve missed one or more mortgage payments, the way to catch up on mortgage payments is to call your loan servicer now and ask about the four workout options lenders use: forbearance, a repayment plan, reinstatement, or a loan modification. Which one fits depends on whether your hardship is short-term or lasting, and on how much cash you can put toward the past-due balance. Federal rules give you at least 120 days before foreclosure can begin, so the earlier you act inside that window, the more choices you keep.
Call Your Servicer Before Anything Else
Your servicer is the company you send your monthly payment to, and it is the only party that can approve a workout. Call as soon as you know you’ll miss a payment, or as soon as you’ve already missed one. Explain what happened — job loss, medical bills, reduced hours, a death in the family — and ask directly about forbearance, repayment plans, reinstatement, and loan modification. Take notes: the representative’s name, the date, what was said, and any deadlines you were given. If you’re asked to submit a written application, get the exact list of documents and the due date in writing.1U.S. Department of Housing and Urban Development. Avoiding Foreclosure
A HUD-approved housing counselor can help you prepare for the call, review offers, and negotiate on your behalf at no cost. Reach one at (800) 569-4287.2Consumer Financial Protection Bureau. What Is a HUD-Approved Housing Counseling Agency, and How Can They Help Me?
The Four Ways to Get Current
Forbearance if the Hardship Is Temporary
Forbearance lets you pause or reduce payments for a set period. It’s often the fastest option because your servicer can grant it based on a phone conversation; a full written application isn’t always required.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures That makes it useful when you need breathing room while you gather documents for a longer-term fix.
What you owe doesn’t disappear. When forbearance ends, servicers commonly offer one of three ways to repay the paused amount:4Consumer Financial Protection Bureau. What Is Mortgage Forbearance?
- Pay the full past-due amount in a lump sum when regular payments resume.
- Add the paused amount to the end of your loan term, keeping your monthly payment the same.
- Spread the shortfall over a set number of future months, raising your payment temporarily.
Interest keeps accruing while payments are paused, so the loan costs more overall. Ask your servicer to spell out how much interest will accumulate and which repayment method will apply before you agree.
Reinstatement if You Can Pay a Lump Sum
Reinstatement means paying the full overdue balance at once — missed principal and interest, late fees, and any legal costs already tacked on. Late fees typically run about 4% of the missed monthly payment on FHA and VA loans and about 5% on conventional loans. Legal fees can range from a few hundred to several thousand dollars depending on how far the foreclosure has progressed.
Reinstatement stops foreclosure and restores your loan to current standing. How late in the process you can still reinstate depends on your loan contract and your state’s foreclosure law, so ask your servicer for the exact cutoff date in your case.
Repayment Plan if Your Income Has Stabilized
A repayment plan spreads the past-due amount across your future monthly payments until you’re caught up.5Consumer Financial Protection Bureau. What Is a Repayment Plan on a Mortgage? It works when you can afford your regular payment plus a little extra each month, but not a single lump sum.
Length depends on how far behind you are. For Fannie Mae-backed loans, borrowers fewer than 90 days delinquent can get up to a six-month plan without special approval, and plans of up to 12 months are available for borrowers further behind.6Fannie Mae. D2-3.2-02, Repayment Plan Freddie Mac also allows plans of up to 12 months.7Freddie Mac. Understanding Options to Stay in Your Home The plan will be put in writing, and missing even one payment can void it.
Loan Modification if You Need a Lower Payment Permanently
A loan modification changes the terms of your existing mortgage. Common changes include reducing the interest rate, extending the term up to 40 years, or deferring part of the principal to the end of the loan.8Federal Register. Increased Forty-Year Term for Loan Modifications Your servicer may combine several of these to bring your payment down.
Before a modification becomes permanent, you’ll usually have to complete a trial period plan of three to four months, paying the proposed new amount by the last day of each month.9Fannie Mae. D2-3.2-06, Fannie Mae Flex Modification Miss a trial payment and the modification is canceled. Treat the trial as seriously as the final agreement.
Refinancing, by contrast, is not a way to fix an active delinquency. Conventional refinancing generally requires no payments more than 60 days late in the past 12 months, and FHA refinancing requires 12 months of on-time payments. Once you’ve brought the loan current another way and enough time has passed, refinancing may become a useful long-term option.
Government and Free Help
The Homeowner Assistance Fund, created by the American Rescue Plan Act, distributed roughly $10 billion through state agencies to help homeowners cover mortgage arrears, insurance, and utilities.10U.S. Department of the Treasury. Homeowner Assistance Fund The program is scheduled to end in September 2026 or when the money runs out, whichever comes first, and some states have already exhausted their allocations.11Consumer Financial Protection Bureau. Get Homeowner Assistance Fund Help Check your state’s program early.
HUD-approved counselors work outside your relationship with the servicer and can help you evaluate finances, complete paperwork, and push back on a denial. The service is free.1U.S. Department of Housing and Urban Development. Avoiding Foreclosure
What Your Servicer Will Ask For
A repayment plan or modification requires a loss mitigation application. Forms vary, but the core items are consistent:
- Pay stubs, typically covering at least the last 30 days.
- Signed federal tax returns, usually for the last one or two years.
- Bank statements, generally the last two months.
- A short hardship letter explaining what happened and whether the setback is temporary or ongoing.
- A list of your monthly income, expenses, and other debts.
Send documents through the channel your servicer specifies. If you mail them, use certified mail with a return receipt.
Federal rules put your servicer on the clock. Within five business days of receiving your application, it must tell you whether it is complete or what is missing. Within 30 days of getting a complete application, it must evaluate you for every available option and send a written decision.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures If a modification is denied, you have 14 days from the date of the decision to appeal, and a different person at the servicer must handle the review. Include updated documents if your finances have changed.
Foreclosure Protections While You Work It Out
Your servicer cannot begin foreclosure until your loan is more than 120 days past due.12Consumer Financial Protection Bureau. 12 CFR 1024.41 – Loss Mitigation Procedures That four-month window exists so you can apply for help; use it early rather than late.
Once you submit a complete loss mitigation application, federal rules ban dual tracking. If foreclosure hasn’t started, the servicer can’t file the initial notice while your application is under review. If it has started, the servicer can’t move to a foreclosure sale while reviewing your file.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures The protection applies as long as your complete application arrives more than 37 days before a scheduled sale.
What Catching Up Can Still Cost You
Credit
Every missed payment reported to the credit bureaus lowers your score, and the damage grows with each additional month of delinquency. A modification can also show up as a changed account and drag your score down. Even so, the credit hit from a modification is generally less severe than a foreclosure, which can stay on your report for seven years and block a new mortgage for two to seven years depending on the loan program. Consistent on-time payments after you’re back on track let your score recover.
Taxes on Forgiven Principal
If your modification reduces the principal you owe, the IRS generally treats the forgiven amount as taxable income. A federal exclusion for forgiven mortgage debt on a primary residence expired on December 31, 2025.13IRS. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments For 2026, forgiven principal may be fully taxable unless Congress acts or another exclusion applies, such as the insolvency exception, which can shelter forgiven debt when your total liabilities exceed your total assets at the time of forgiveness. Ask a tax professional before you sign a modification that includes principal reduction.
Escrow Shortage
After you’re current again, your monthly payment may still go up. Missed payments can leave your escrow account short, and once the annual analysis runs, your servicer will offer either a lump-sum payment for the shortage or a 12-month spread added to your regular payment. Build room in your budget for it so a higher payment doesn’t pull you back into delinquency.