If you’re struggling to make your mortgage payment, contact your mortgage servicer and a HUD-approved housing counselor as soon as possible. You may have options to keep your home.
For many Louisiana homeowners, keeping up with monthly expenses has become increasingly difficult. Between homeowners insurance, property taxes, groceries, utilities, transportation, and other everyday necessities, household budgets can become stretched thin.
Sometimes, it only takes one unexpected expense, a reduction in income, or a medical emergency to put an otherwise financially stable household in a difficult position.
When money gets tight, homeowners may find themselves making tough decisions about which bills to pay first. Unfortunately, falling behind on mortgage payments can have serious consequences.
But missing a mortgage payment doesn’t automatically mean you’re going to lose your home. And selling your house isn’t necessarily your only option.
There are several potential ways to address mortgage difficulties, including options that may allow you to stay in your home. Understanding those options and taking action early can make a significant difference.
Why Homeowners Fall Behind on Mortgage Payments
Mortgage difficulties aren’t always the result of poor financial decisions. Even homeowners who have consistently made their payments can experience circumstances beyond their control.
Some common causes include:
- Job loss, reduced working hours, or declining household income
- Rising homeowners insurance premiums and property taxes
- Unexpected medical expenses
- Divorce or separation
- Major home repairs
- Increasing credit card debt and other financial obligations
- The loss of a spouse or another contributing household member
In Louisiana, homeowners insurance can be a particularly significant expense. When insurance premiums or property taxes increase, homeowners whose payments include an escrow account may see their total monthly mortgage payments increase, even if they have a fixed interest rate.
The result can be a mortgage payment that was once affordable but is now difficult to manage.
If you’re experiencing this situation, the important thing is to recognize the problem early rather than waiting until you’re several months behind.
What Happens When You Miss a Mortgage Payment?
When you miss a mortgage payment, your loan becomes delinquent. Depending on your mortgage agreement, you may incur late fees, and continued delinquency can negatively affect your credit.
As missed payments accumulate, your mortgage servicer may begin sending notices about the delinquency and available assistance programs.
Eventually, if the delinquency remains unresolved, the lender may initiate foreclosure proceedings.
However, foreclosure generally doesn’t happen immediately.
For most residential mortgage loans covered by federal mortgage servicing rules, a servicer generally cannot make the first foreclosure notice or filing until the borrower is more than 120 days delinquent. Certain exceptions apply, and the time between foreclosure filing and an actual sale varies.
Do not assume that you have 120 days remaining once you receive a foreclosure notice. The applicable timeline depends on your circumstances and where you are in the process.
The Consumer Financial Protection Bureau (CFPB) provides additional information about mortgage delinquency and foreclosure timelines.
If you’ve already received a foreclosure notice or have a sheriff’s sale scheduled, time is especially important. Federal mortgage servicing rules provide certain protections for borrowers who submit complete loss mitigation applications sufficiently early, but those protections have deadlines and exceptions. Contact your servicer, a HUD-approved housing counselor, and a Louisiana attorney promptly.
Options That May Help You Keep Your Home
Before considering selling your property, it’s worth exploring whether your financial difficulties can be resolved through an arrangement with your mortgage servicer.
The options available depend on several factors, including the type of mortgage you have, your financial circumstances, and your lender’s requirements.
1. Mortgage Forbearance
Forbearance is an arrangement that temporarily reduces or pauses your mortgage payments.
This can be helpful when you’re experiencing a short-term financial hardship, such as unemployment, an unexpected medical expense, or a temporary reduction in income.
However, forbearance does not eliminate the payments you owe.
Depending on your mortgage program and the arrangement with your servicer, missed payments may need to be repaid through a repayment plan, payment deferral, loan modification, or another approved method.
Before accepting forbearance, make sure you understand how and when the missed payments must be repaid.
Learn more from the CFPB’s mortgage forbearance guide.
2. Loan Modification
A loan modification changes one or more terms of your existing mortgage to help make repayment more manageable.
Depending on the loan and the modification program, this might involve extending the repayment period, changing the interest rate, or incorporating past-due payments into the loan balance.
A modification may reduce your monthly payment, but it can also increase the total interest paid over the life of the loan.
Loan modifications are not guaranteed, and borrowers must generally demonstrate that they qualify under the applicable program.
For homeowners experiencing longer-term financial difficulties, a modification may be worth discussing with their mortgage servicer.
3. Mortgage Repayment Plan
If you’ve fallen behind but can now afford your regular mortgage payment plus an additional amount, your servicer may offer a repayment plan.
For example, if you missed three payments because of a temporary job interruption but have returned to work, a repayment plan might allow you to catch up gradually instead of paying the entire past-due amount immediately.
The challenge is that your monthly payment will generally be higher during the repayment period.
Make sure the arrangement fits your actual household budget before agreeing to it.
4. Payment Deferral or Partial Claim
Depending on your mortgage type and eligibility, you may qualify for an arrangement that moves missed payments to a later date.
A payment deferral may allow certain past-due amounts to become payable when you sell, refinance, or reach the end of your mortgage term.
Some government-backed mortgage programs may offer a partial claim, which can place qualifying overdue amounts into a separate obligation secured by the property.
These programs can be useful when you’ve recovered from a temporary hardship and can afford your regular monthly payment but cannot immediately catch up on missed payments.
They are not available for every mortgage, and their terms vary.
The CFPB explains repayment, deferral, and modification options.
5. Mortgage Refinancing
Refinancing replaces your existing mortgage with a new loan.
In certain circumstances, refinancing may help reduce a homeowner’s monthly payment or restructure debt.
However, refinancing may not be practical if you’re already delinquent, your credit has deteriorated, you lack sufficient equity, or current interest rates are higher than the rate on your existing mortgage.
Refinancing also typically involves closing costs and qualification requirements.
It should be evaluated carefully rather than treated as an automatic solution.
6. Housing Counseling and Financial Assistance
One of the most overlooked resources available to struggling homeowners is housing counseling.
HUD-approved housing counseling agencies can help homeowners review their financial situation, understand mortgage assistance programs, communicate with loan servicers, and evaluate potential foreclosure alternatives.
Importantly, foreclosure prevention counseling is generally available at no cost.
The Louisiana Housing Corporation provides guidance specifically for Louisiana homeowners facing mortgage difficulties.
You can also contact a HUD-approved housing counselor by calling 800-569-4287.
Some homeowners may qualify for additional assistance through state, local, nonprofit, or mortgage-specific programs. Availability, eligibility, and funding can change, so it’s important to verify current program details before relying on any assistance.
What If Keeping Your Home Is No Longer Financially Realistic?
Sometimes, despite a homeowner’s best efforts, keeping the property simply isn’t financially sustainable.
Perhaps the household income has permanently decreased, the mortgage payment is too high, or the property requires repairs the owner cannot afford.
In those circumstances, selling may be an option worth considering, particularly if it allows the homeowner to preserve equity and avoid the additional consequences of foreclosure.
There are several possible approaches.
Selling Through a Traditional Real Estate Listing
If your property has sufficient equity and there is enough time to complete a sale, listing it with a real estate brokerage may allow you to obtain market exposure and potentially maximize your proceeds.
However, you’ll need to consider the property’s condition, market demand, selling expenses, outstanding mortgage balance, and any foreclosure deadlines.
Selling Your House As-Is
If the property needs significant repairs or you don’t have the money to prepare it for a traditional sale, selling as-is may be an alternative.
An as-is sale generally means the seller is not agreeing to make repairs as part of the transaction. It does not eliminate applicable disclosure obligations or guarantee that a buyer will accept every property condition.
Depending on the circumstances, the property might be marketed traditionally in its existing condition or sold directly to an investor.
Each approach has advantages and disadvantages involving price, timing, certainty, and transaction costs.
Short Sale
If you owe more than your property is worth, a short sale may be an option.
A short sale occurs when the mortgage lender agrees to accept less than the outstanding loan balance to facilitate the sale.
Short sales generally require lender approval and can involve additional documentation, negotiation, and time.
Homeowners should also determine whether any remaining debt will be forgiven and whether the transaction could create tax or other financial consequences.
For more information, read our related article:
Mortgage Debt Exceeds Home Value: What Are Your Options?
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure involves voluntarily transferring ownership of the property to the lender through an approved arrangement.
It may be considered when other options have been exhausted, but lenders are not required to accept it.
Before proceeding, homeowners should obtain professional guidance and understand how the agreement addresses any remaining mortgage debt, other liens, credit consequences, and potential tax implications.
Understanding Foreclosure in Louisiana
Louisiana’s foreclosure process differs from those in many other states.
Foreclosures in Louisiana generally proceed through the court system, frequently using a procedure known as executory process.
Under executory process, a lender with the required legal documentation can request a court order allowing the property to be seized and sold.
This process can move relatively quickly once initiated, and homeowners may have limited time to assert legal defenses.
If you’ve received a notice of seizure, sheriff’s sale, or other foreclosure-related legal documents, contact a qualified Louisiana attorney immediately.
Do not assume that contacting a real estate investor, listing your house, or submitting an assistance application will automatically stop an impending foreclosure sale.
For additional information, visit LouisianaLawHelp’s guide to executory process foreclosure.
Beware of Foreclosure Rescue Scams
Unfortunately, homeowners experiencing financial difficulties can become targets for individuals and companies promising to stop foreclosure or save their homes.
Some of these offers may sound appealing, especially when a homeowner is facing an approaching foreclosure deadline.
But not every company offering foreclosure assistance is legitimate, and some arrangements can leave homeowners in an even worse financial position.
Be especially cautious of anyone who approaches you after a foreclosure filing and claims they can guarantee a solution. Before paying fees, signing documents, or transferring any ownership interest, verify the person’s credentials and consider obtaining independent legal advice. Legitimate foreclosure prevention counseling is available free through HUD-approved agencies.
Warning Signs to Watch For
Be particularly cautious if someone:
- Guarantees they can stop your foreclosure, regardless of your circumstances.
- Demands upfront payment for mortgage relief services.
- Tells you to stop communicating with your lender or mortgage servicer.
- Instructs you to send mortgage payments to someone other than your authorized servicer.
- Pressures you to sign documents without allowing sufficient time for review.
- Asks you to transfer ownership of your property as part of a supposed foreclosure rescue.
- Claims to represent a government agency without verifiable credentials.
- Promises you can remain in your home through a complicated sale-and-leaseback arrangement without clearly explaining the risks.
Be Especially Careful With Contracts and Powers of Attorney
Some real estate transactions involve investors or other parties offering to take control of the sale process while promising the homeowner a certain amount of money.
Not every investor transaction or power-of-attorney arrangement is improper. However, homeowners should understand exactly what they’re agreeing to before signing.
A contract may grant another party substantial control over the property, its marketing, or the proceeds of a future sale.
Before signing a purchase agreement, power of attorney, deed, or other document that affects ownership or control of your home, consider having an independent Louisiana real estate attorney review it.
Never transfer ownership or sign away control of your property based solely on a verbal promise that someone will save it from foreclosure.
Where Louisiana Homeowners Can Find Reliable Help
If you’re struggling to make your mortgage payments, consider starting with these resources:
Louisiana Housing Corporation
Provides Louisiana homeowners with information about foreclosure prevention, housing counseling, and available assistance resources.
Visit Louisiana Housing Corporation
U.S. Department of Housing and Urban Development (HUD)
Offers information about foreclosure prevention and access to HUD-approved housing counseling agencies.
Visit HUD’s Foreclosure Prevention Resources
Housing Counseling: 800-569-4287
Consumer Financial Protection Bureau (CFPB)
Provides consumer education about mortgage assistance programs, foreclosure protections, and mortgage-related scams.
Explore CFPB Mortgage Assistance Options
HOPE Hotline
Homeowners can contact the HOPE Hotline at 888-995-HOPE (4673) for assistance connecting with foreclosure prevention counseling resources.
The Most Important Step Is Taking Action Early
When financial difficulties begin, it’s tempting to hope things will improve on their own.
Sometimes they do. But ignoring missed mortgage payments, lender notices, or mounting financial obligations can make an already difficult situation worse.
If you’re worried about making your next mortgage payment, contact your mortgage servicer before the situation becomes more serious.
Ask what assistance programs may be available, review your household finances, and consider speaking with a HUD-approved housing counselor.
If keeping your home is financially realistic, that may be the best outcome.
If it isn’t, understanding your property’s value, mortgage balance, and selling options can help you make an informed decision before foreclosure limits your choices.
Need Help Understanding Your Property Options?
At REvitalize Property Solutions, we understand that every homeowner’s circumstances are different.
Some homeowners are dealing with unexpected financial hardship. Others have inherited a property, fallen behind on payments, or own a house that needs repairs they cannot afford.
Our goal is to help property owners understand their real estate options, not pressure them into a particular decision.
If keeping your home through a mortgage assistance program is possible, we encourage you to explore that option first.
If selling becomes the appropriate next step, REvitalize Property Solutions and GNO Realty, a separate licensed real estate brokerage, can help you evaluate potential approaches, including a traditional listing, an as-is sale, or other appropriate real estate solutions.
You deserve to understand your options before making a major financial decision.
Contact REvitalize Property Solutions
Disclaimer: This article is intended for general educational purposes and does not constitute legal, tax, or financial advice. Mortgage assistance eligibility, foreclosure procedures, and available remedies vary. Homeowners facing foreclosure should consult their mortgage servicer, a HUD-approved housing counselor, and a qualified Louisiana attorney as appropriate.
