How to Get Free HUD-Approved Foreclosure Counseling When You Cannot Pay Your Mortgage

Contact your mortgage servicer and a HUD-approved counselor now

If you cannot make your mortgage payment or believe you may miss one soon, the federal guidance is clear: contact your mortgage servicer as soon as possible and also seek help from a HUD-approved housing counseling agency.

You do not need to be several months behind, and you do not need to wait for foreclosure proceedings to start. HUD specifically encourages homeowners to get assistance early because more options may be available before the delinquency becomes severe.

Your mortgage servicer is generally the company that receives your monthly mortgage payments. Its telephone number appears on your mortgage statement and usually on its official website.

How do you find a HUD-approved foreclosure counselor?

HUD maintains a national network of participating housing counseling agencies and certified housing counselors.

You can find an agency in two official ways:

• use HUD's online housing-counselor search and search by ZIP code or state; or
• call HUD at 800-569-4287 for assistance locating an agency.

HUD's search can also help you identify agencies by counseling method and service type. Not every participating agency offers every service, so confirm that the agency provides mortgage-delinquency or foreclosure-prevention counseling.

Foreclosure-prevention counseling is free

HUD states that foreclosure counseling is always free through participating housing counseling agencies.

This is different from some other housing counseling services or workshops, for which an agency may under HUD rules charge a nominal, reasonable and customary fee. The foreclosure-prevention counseling covered by this procedure should not carry such a counseling fee.

CFPB likewise advises homeowners that free foreclosure help is available and warns against businesses that demand advance payment for promises to stop a foreclosure.

You do not need an FHA loan

A common misconception is that HUD-approved counseling is limited to homeowners with FHA-insured mortgages.

HUD expressly states that you do not need an FHA-insured mortgage to meet with a HUD-approved housing counseling agency for foreclosure-prevention assistance.

The exact loss-mitigation programs available to you will still depend on the mortgage type, loan owner or investor, servicer rules and applicable law.

You can get help before you are behind

You do not have to wait until you miss a mortgage payment.

HUD advises homeowners to seek help when financial circumstances change and it becomes difficult to make the monthly payment. Examples can include loss of employment, higher housing expenses, divorce, medical expenses or other financial hardship.

Early contact gives the servicer and counselor more time to evaluate alternatives before foreclosure deadlines become urgent.

What can the counselor actually help with?

HUD-certified housing counselors provide independent guidance tailored to a homeowner's circumstances.

For a mortgage-payment or foreclosure problem, a counselor can help you:

• review your financial situation;
• understand your mortgage and delinquency;
• identify programs or assistance that may apply;
• understand the loss-mitigation options offered by the mortgage servicer;
• organize financial documents and mortgage-assistance paperwork;
• develop a plan for addressing the delinquency;
• communicate with the mortgage servicer; and
• understand other financial problems that may be affecting your ability to pay the mortgage.

The counselor cannot guarantee that the servicer will approve a particular option or that foreclosure will be stopped.

What should you prepare before counseling?

HUD does not impose one universal consumer document checklist for every foreclosure-counseling case. The documents needed vary with the mortgage, hardship and agency.

However, CFPB advises borrowers contacting a mortgage servicer to be prepared to explain:

• why you cannot make the payment;
• whether the hardship is temporary or permanent;
• your income;
• your expenses; and
• assets such as available cash.

For counseling, it is useful to have the same financial information available along with your mortgage statement, delinquency notices, foreclosure notices and correspondence from the servicer.

Understand the servicer's loss-mitigation process

Loss mitigation is the process through which a mortgage servicer evaluates alternatives that may reduce or avoid the loss associated with foreclosure.

Depending on your mortgage and circumstances, options discussed by CFPB can include:

• forbearance;
• a repayment plan;
• a loan modification;
• refinancing where available;
• a short sale; or
• a deed-in-lieu of foreclosure.

Some options are designed to keep the homeowner in the property. Others provide a structured way to leave the property without completing a foreclosure.

A HUD-approved counselor can help you understand what your servicer is offering, but the counselor does not decide whether the servicer must approve a particular loss-mitigation option.

Complete the mortgage-assistance application carefully

Your mortgage servicer may ask you to complete a loss-mitigation or mortgage-assistance application.

Provide all information and supporting documents requested by the servicer. An incomplete application can delay evaluation and can affect protections that depend on submission of a complete loss-mitigation application.

A HUD-approved counselor can help you understand the forms and organize the required paperwork.

The 37-day foreclosure-sale rule can be critical

If a foreclosure sale has already been scheduled, timing becomes especially important.

Under the federal mortgage-servicing rule at 12 CFR 1024.41, if the rule applies to your mortgage and the servicer receives a complete loss-mitigation application more than 37 days before a foreclosure sale, important evaluation and foreclosure protections generally apply.

CFPB therefore advises homeowners to make sure the servicer receives a complete application more than 37 days before the scheduled sale.

An application submitted 37 days or less before a sale may not receive the same protections under this federal rule, although other mortgage-program requirements or state laws may still apply.

When must the servicer respond to a complete application?

When Regulation X applies and a servicer receives a complete loss-mitigation application more than 37 days before a scheduled foreclosure sale, the servicer generally must evaluate the borrower for available loss-mitigation options and provide a written determination within 30 days.

The result may include an offer of one or more options or a denial. The specific programs available depend on the mortgage owner or investor and the borrower's circumstances.

This federal timing rule is separate from the time required to obtain a counseling appointment. HUD does not publish a single nationwide processing time for foreclosure counseling itself.

Counseling alone does not automatically stop foreclosure

Contacting a housing counselor is important, but merely making a counseling appointment does not automatically stop or postpone a foreclosure.

Foreclosure protections may depend on federal servicing rules, state foreclosure law, court orders, the mortgage program and whether a complete loss-mitigation application was submitted on time.

If you have already received legal papers or a foreclosure-sale date, tell the counselor immediately. CFPB also advises that homeowners facing imminent foreclosure or legal proceedings may need to consult an attorney.

Can foreclosure counseling be done online or by phone?

Yes. HUD states that participating housing counseling agencies may offer secure online and telephone counseling.

Use HUD's online search tool to identify agencies that offer your preferred counseling method. Availability depends on the individual agency.

HUD's telephone assistance at 800-569-4287 can also help locate an approved agency, including agencies offering services in languages other than English.

Can you request counseling in another language?

Yes. HUD says callers to 800-569-4287 can speak with a live operator in a wide variety of languages.

You can also specify your preferred language when selecting an agency and use HUD's online search to identify participating agencies offering counseling in languages other than English.

A counselor can help you communicate with the mortgage company

One of the practical benefits of HUD-approved counseling is help working through communication with your mortgage servicer.

HUD states that housing counselors can help homeowners understand options, organize finances and, when assistance is needed, communicate or negotiate with lenders and servicers.

Keep records of every contact, including dates, names, telephone calls, letters, uploaded documents and confirmation numbers.

If you have an FHA-insured mortgage

FHA-insured mortgages are subject to FHA servicing and loss-mitigation requirements in addition to other applicable law.

HUD advises FHA borrowers having problems working with their servicer that they can contact the FHA Resource Center at 800-CALL-FHA (800-225-5342).

When contacting FHA about a servicing problem, HUD recommends having the names of the people on the mortgage, the full property address and, when available, the FHA case number.

Do not pay a company promising to save your home

HUD and CFPB both warn homeowners about foreclosure-rescue scams.

Warning signs include a company that:

• demands upfront payment for foreclosure help;
• guarantees that it can stop foreclosure;
• guarantees a mortgage modification;
• tells you to stop communicating with your mortgage servicer;
• instructs you to send mortgage payments somewhere other than the servicer;
• asks you to sign over title to the home; or
• asks you to sign documents you do not understand.

HUD-approved foreclosure counseling itself is free, so you do not need to pay a foreclosure-rescue company merely to obtain counseling and help understanding your options.

Common mistakes to avoid

• Waiting until the foreclosure sale is close: contact your servicer and a HUD-approved counselor as soon as payment trouble begins.
• Ignoring servicer letters: they may contain deadlines, requests for documents or foreclosure notices.
• Assuming HUD counseling is only for FHA loans: HUD-approved foreclosure counseling is available regardless of whether your mortgage is FHA-insured.
• Paying for foreclosure counseling: HUD states that foreclosure counseling is always free.
• Submitting an incomplete assistance application: missing documents can delay the servicer's evaluation.
• Missing the federal 37-day threshold: a complete application received more than 37 days before a scheduled sale can carry protections that may not apply when submitted later.
• Assuming counseling itself stops foreclosure: it does not automatically suspend a sale or legal proceeding.
• Believing guarantees from foreclosure-rescue companies: no legitimate counselor can guarantee a particular modification or promise that a foreclosure will be stopped.

What happens after counseling?

The counselor can help you develop a plan based on your finances, mortgage status and available options.

You may need to:

• submit or complete a mortgage-assistance application;
• provide additional documents to the servicer;
• review a forbearance, repayment or modification offer;
• consider an alternative such as a short sale or deed-in-lieu when keeping the home is not feasible; or
• seek legal assistance if foreclosure litigation or an imminent sale requires it.

Continue communicating with the mortgage servicer while working with the counselor. Respond promptly to document requests and keep copies of everything submitted.

There is no guaranteed result: counseling helps you understand and pursue available options, while approval of a particular mortgage solution depends on the servicer, loan program, investor rules and applicable law.