Realizing a mortgage payment is out of reach, whether it’s next month’s or one already missed, is stressful, but it isn’t a dead end. There are several real paths forward, some that keep the home and some that don’t, and most of them work better the earlier they’re explored.
Quick answer: Options generally fall into three categories: temporarily adjusting the loan through forbearance or a repayment plan, permanently adjusting it through a loan modification or refinance, or resolving the mortgage entirely by renting out the property, selling it, or in some cases pursuing a short sale or deed in lieu of foreclosure. The right choice depends on whether the goal is to keep the home, how much the hardship is expected to last, and how much equity the property has.
Start With the Servicer, Not the Panic
The mortgage servicer, the company that collects payments, isn’t automatically an adversary. Servicers are required to make contact attempts and provide information about assistance options once a loan becomes delinquent, and reaching out proactively, before missing a payment if possible, tends to open more doors than waiting.
Option 1: Forbearance
Forbearance is a temporary pause or reduction in mortgage payments, typically used for short-term hardships like a job loss or medical emergency.
- What it involves: An agreement with the servicer to reduce or suspend payments for a set period, usually a few months, sometimes longer depending on the loan type and hardship.
- What happens afterward: The paused amount doesn’t disappear. It typically needs to be repaid through a repayment plan, a loan modification, or in a lump sum, depending on what the servicer offers.
- Best fit: A hardship with a clear, foreseeable end, like a temporary layoff or a short-term medical leave.
Option 2: A Repayment Plan
A repayment plan spreads missed payments out over several months on top of the regular payment, rather than requiring a lump sum all at once.
- Best fit: A shorter gap in payments, where income has recovered enough to handle a somewhat higher monthly payment for a limited time.
Option 3: Loan Modification
A loan modification permanently changes the terms of the mortgage, which might include a lower interest rate, an extended loan term, or in some cases, principal deferral.
- What it involves: Submitting a complete application to the servicer with income and hardship documentation. Federal servicing rules limit foreclosure activity while a complete application is under review.
- Best fit: A longer-term or permanent change in circumstances, such as reduced income that isn’t expected to bounce back to its previous level.
- Worth knowing: Approval isn’t guaranteed, and the new terms depend on the servicer’s guidelines and the specific loan.
Option 4: Refinancing
Refinancing replaces the current loan with a new one, potentially at a lower rate or with different terms.
- Best fit: Homeowners who are current or only slightly behind, with enough credit and income to qualify for a new loan.
- Worth knowing: Refinancing generally isn’t available once a loan is significantly delinquent or a Notice of Default has been recorded, since most lenders require the loan to be current or close to it.
Option 5: Free Housing Counseling and Assistance Programs
A HUD-certified housing counselor can review income, the loan, and available programs at no cost, and can often communicate directly with the servicer on the homeowner’s behalf.
It’s worth knowing that California’s original pandemic-era Mortgage Relief Program, which provided grants to help homeowners catch up on missed payments, closed to new applications in early 2026 after distributing its full federal allocation. Newer, more limited programs have emerged since, some tied specifically to disaster-related hardship, such as wildfire or flood damage. Because programs like this open, close, and change eligibility rules over time, it’s worth checking directly with a HUD-certified counselor or CalHFA for whatever assistance is currently available rather than relying on older information.
Never pay an upfront fee for mortgage relief help. Charging fees before providing loss mitigation services is illegal in California, and legitimate counseling through HUD-approved agencies is always free.
Option 6: Renting Out the Property
If the goal is to keep ownership without living in the home right now, renting it out can generate income to cover some or all of the mortgage.
- Best fit: An owner who can move elsewhere temporarily, or who has another living arrangement, and where market rent covers a meaningful share of the payment.
- Worth knowing: This takes time to arrange, generally isn’t a fast enough solution if a foreclosure deadline is close, and turns the owner into a landlord, with the responsibilities that come with that.
Option 7: Selling the Property
If keeping the home isn’t realistic or isn’t the priority, selling resolves the mortgage directly.
- Traditional or as-is listing: Works well with equity and enough time before any deadline; may bring the highest price.
- Short sale: Selling for less than what’s owed, with the lender’s approval, when the loan exceeds the home’s value.
- Direct sale to a buyer: Faster closing, useful when time is short or certainty matters most; typically a lower offer than a fully marketed sale.
Option 8: Deed in Lieu of Foreclosure
A deed in lieu involves voluntarily transferring the property back to the lender instead of going through a full foreclosure.
- Best fit: Underwater on the loan, with a sale not realistic, and the priority is limiting further damage rather than recovering equity.
- Worth knowing: This still affects credit, though sometimes less severely and less protractedly than a completed foreclosure, and it typically requires the lender’s agreement, since not every servicer will accept one.
Option 9: Bankruptcy
Bankruptcy can pause foreclosure proceedings and, depending on the type filed, may allow catching up on missed payments over time or discharging other debt to free up income for the mortgage.
- Worth knowing: This is a significant legal step with real consequences for credit and finances, and it should be discussed with a bankruptcy attorney rather than approached without professional guidance.
Comparing the Options
| Option | Keeps the Home? | Best Fit |
|---|---|---|
| Forbearance | Yes | Short-term hardship |
| Repayment plan | Yes | Small, manageable catch-up amount |
| Loan modification | Yes | Longer-term change in income |
| Refinance | Yes | Current or nearly current on payments |
| Rent out the property | Yes (as investment) | Owner can relocate, rent covers costs |
| Sell traditionally or as-is | No | Equity available, time to market |
| Short sale | No | Underwater on the loan |
| Direct sale | No | Speed and certainty matter most |
| Deed in lieu | No | Underwater, sale not realistic |
| Bankruptcy | Possibly | Broader financial reorganization needed |
How Timing Affects Which Options Are Realistic
Options shrink as delinquency grows and any foreclosure timeline advances. Forbearance and a repayment plan work best before or shortly after missing a payment. Loan modification applications are strongest when submitted early, since federal rules limit foreclosure activity while a complete application is pending, but that protection has limits once a case gets close to a scheduled sale. Refinancing generally requires being current or nearly current. Once a Notice of Default or Notice of Trustee Sale is recorded, selling, whether traditional, as-is, short sale, or direct, tends to become the most realistic path if reinstating or modifying the loan isn’t feasible.
A Realistic Example
A homeowner in the South Bay loses a second income source and falls one payment behind. Reaching out to the servicer immediately leads to a short-term forbearance while the household adjusts its budget and looks for replacement income. In a different case, a homeowner whose reduced income is permanent, after an early retirement that wasn’t planned, works with a HUD-certified counselor to explore a loan modification, and when that doesn’t lower the payment enough, ultimately decides selling the home and downsizing is the more sustainable path. Neither situation has a single right answer. The hardship’s likely duration is usually the deciding factor.
Legal and Financial Considerations
None of this is legal, tax, or financial advice. A HUD-certified housing counselor can review income and hardship details and help identify current programs, generally at no cost. An attorney can explain rights tied to a specific Notice of Default or advise on bankruptcy. A tax professional can address questions tied to loan modifications, short sales, or forgiven debt. Never pay an upfront fee for mortgage assistance, since doing so is illegal in California under state consumer protection law.
Los Angeles-Specific Notes
Los Angeles County’s high housing costs mean many homeowners facing hardship still have significant equity, which is worth confirming through a payoff statement and a market value estimate before ruling out a sale. CalHFA and HUD-certified counseling agencies serving Los Angeles County can help evaluate whatever programs are currently available.
Frequently Asked Questions
What should I do first if I can’t afford my mortgage?
Contact the servicer directly, ideally before missing a payment, and ask about forbearance, a repayment plan, or loan modification options. A HUD-certified housing counselor can also help evaluate what’s available at no cost.
Is there still a California grant program to help catch up on missed payments?
The original California Mortgage Relief Program, funded through pandemic-era federal relief, stopped accepting applications in early 2026 after distributing its full allocation. Newer, more limited programs have emerged for specific situations, such as disaster-related hardship, so it’s worth checking directly with CalHFA or a HUD-certified counselor for current options.
What’s the difference between forbearance and a loan modification?
Forbearance is a temporary pause or reduction in payments, meant for short-term hardship. A loan modification permanently changes the loan’s terms and is meant for a longer-term or permanent change in circumstances.
Can I refinance if I’m behind on payments?
Generally, no. Most lenders require a loan to be current or close to it before approving a refinance.
What if renting out the property would cover the mortgage?
That can be a way to keep the home as an investment while living elsewhere, though it takes time to arrange and generally isn’t fast enough if a foreclosure deadline is close.
Is selling my only option if I can’t afford my mortgage?
No. Forbearance, a repayment plan, a loan modification, or renting out the property can all address the situation without selling, depending on the hardship and how long it’s expected to last.
What if my loan balance is more than my home is worth?
A short sale, selling for less than owed with the lender’s approval, or a deed in lieu of foreclosure are both options worth discussing with the lender and a housing counselor.
Should I consider bankruptcy?
It depends on the broader financial picture, not just the mortgage. A bankruptcy attorney can explain whether it would help pause foreclosure or address other debt alongside the mortgage.
Is it too late to explore these options if I already have a Notice of Default?
No. Loan modification, selling, a short sale, and other options all remain possible after a Notice of Default is recorded, though the available time becomes more defined.
How do I avoid mortgage relief scams?
Never pay an upfront fee for assistance, since it’s illegal in California. Work with HUD-certified counselors, the servicer directly, or licensed professionals, and be cautious of anyone promising guaranteed results without reviewing actual numbers.
How EZ Casa Buyer May Help
We talk with Los Angeles homeowners at every point in this decision, whether the goal is to keep the home through a modification or forbearance, or to move forward with a sale because that’s the more sustainable path. If selling turns out to be the right fit, we’ll walk through the numbers honestly and explain how a direct sale compares to other selling options.
Tell Us About Your Property
Selling a Property During Foreclosure
Foreclosure can create strict deadlines for a homeowner considering a sale. Understanding the mortgage payoff, liens, equity, and scheduled foreclosure dates is important. If selling is appropriate, homeowners may explore a direct property buyer in Los Angeles as one possible route before a completed foreclosure sale.
Selling When You Are Behind on Your Mortgage
Missing mortgage payments can become increasingly difficult as the delinquent balance grows. Homeowners should contact their mortgage servicer and review all available alternatives. If keeping the property is no longer financially realistic, you may decide to sell your property in Los Angeles before the situation progresses further.