What to Do If You Are Struggling to Pay Your Mortgage

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If you’re having problems paying your mortgage, help is within your reach.

Take heart knowing you’re not the only one scrambling to meet debt payments on the home you own – especially during the COVID-19 era. The percentage of homeowners at least one payment delinquent jumped 4 percentage points in the second quarter of 2020, when the economic impact was just beginning, according to the Mortgage Bankers Association.

The problem could not be more apparent, said Marina Walsh, vice president of industry analysis in MBA’s research and economics department. “The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” dating to 1979.

If you have a government-backed mortgage, you may find a safe harbor in the federal CARES Act, signed into law on March 27. It stands for the Coronavirus Aid, Relief and Economic Security Act. You may get some relief at the state level as well. Be aware, however, of the pitfalls. Read on.

Applying for such accommodations is not for the timid. Your credit is at stake. Ultimately your ownership of your home is at stake as well.

Call Loan Lawyers, a Foreclosure Defense, Debt Defense and Bankruptcy Law Firm. We serve Fort Lauderdale, South Florida and beyond. We’ve helped 5,000 families get out of debt and look forward to helping you, whether your mortgage is privately held or backed by the federal government.

Loan Modification

If you’ve missed payments and are trying without success to catch up, you may not have the funds to pay the full amount you owe. In this instance, a loan modification agreement may be a workable option. While it is possible to achieve a modification directly with your mortgage servicer, you may get more favorable terms through the experienced Loan Modifications Attorneys at Loan Lawyers.

A loan modification is an agreement between you and the mortgage company to change the original terms of the mortgage. This includes the payment amount, length of the loan, and interest rate. The purpose is to prevent foreclosure and keep you in your house by lowering the payments so you can afford them – without having to come up with the total amount you’re behind.

A modification may be an option if:

  • You are ineligible to refinance due to delinquent payments in the past 24 months.
  • You are facing a long-term hardship that impacts your ability to pay.
  • You are several months behind on your mortgage payments or likely to fall behind soon.
  • You have the ability to begin making modified payments.

Repayment Plan

Say you’ve gone through the process and achieved a loan modification, then fall behind again. Can you get a second modification?

Yes, according to Lutheran Social Services, a nonprofit service. Statistically, you’re less likely to get a second loan modification if you’ve had a first. It is possible though. In fact, the majority of homeowners currently applying for modifications have already had some kind of work-out option and some do get approved.

As long as you want to keep the home and have the stability and income to afford reasonable payments, there is no reason to not apply. You may find the process less difficult since you’re been through it before.


Spurred by the CARES Act, many mortgage companies are offering to help – but it typically comes in the form of a forbearance, not payment forgiveness. Forbearance is when the mortgage company allows you to temporarily halt making payments, typically to help borrowers in time of economic crisis.

The benefit to you is not having to make a payment for a few months. Sounds too good to be true? It is. As soon as the forbearance period is over, the bank typically wants all missed payments in full immediately, or they’ll start foreclosure proceedings.

Short Sale

A short sale, or pre-foreclosure sale, is when the bank agrees to allow your house to be sold for less than what you owe. The “short” in short sale refers to the payoff being less than what is owed, not how long it takes to complete the process. In fact, short sales can be quite lengthy, averaging 3-9 months to complete, sometimes longer.

Deed in Lieu of Foreclosure

Most people want to avoid foreclosure if possible. This plan lets you avoid the foreclosure process by signing over the deed to the home to your servicer. The home will then belong to the servicer.

The primary disadvantage to you as the homeowner is the loss of your home, any income it may generate and your investment in it. It is also taxable.

Bankruptcy as an Option to Stop Foreclosure

If you’ve exhausted all other options, filing for bankruptcy may delay foreclosure in the state of Florida. Filing for Chapter 7 or Chapter 13 creates an automatic stay, which means that creditors may not continue trying to collect what you owe. This could delay the sale of your home for three or four months.

In that time period, it may be possible for you to gather the funds to satisfy the loan. On the other hand, the lender could file a motion to lift the stay.

Another option is to file for Chapter 13, which prompts consumers to pay off debts through a repayment plan that spans years. This could enable someone to keep his or her home.

Our Experienced Attorneys at Loan Lawyers Can Help

Bankruptcy and foreclosure proceedings are typically complex and should be handled by a qualified professional like Loan Lawyers. Act now, before filing deadlines have passed, adding unnecessary complications. Learn how the CARES Act may ease your situation as it relates to the pandemic.

Loan Lawyers is a Foreclosure Defense, Debt Defense and Bankruptcy Law Firm. It’s our mission and our passion to help save your home, eliminate debt and restore your peace of mind. It all starts with a phone call. Reach out to us now.