If you start having difficulties making your monthly mortgage payments, you have a serious problem! Even one missed payment can be difficult to make up. If you find yourself in this situation, you need to get help right away.

First, get in touch with your lender (or loan servicer) immediately to explain your situation.

Also consider all possible resources. Is there a relative you might be able to borrow from? Do you have a profit-sharing plan or an insurance policy you can borrow from? Can you cut back, at least temporarily, on other expenses? Can you work overtime or get a second, part-time job? Look for a local accredited credit counseling agency to help you organize your finances and establish a workable repayment plan.

Note: Don't be tempted to catch up on missed mortgage payments by taking out a short-term loan from a loan company or by taking a cash advance on your credit card. The interest rate on consumer credit is very high and may result in more serious financial trouble later.

a. Contacting your lender (or servicer)

When they encounter financial problems, some people avoid calling their creditors for as long as possible. This is the wrong strategy if you wish to keep your home.

When you call the lender (or the servicer to whom you send your monthly payments), explain that your payments are overdue and explain why you have been unable to make them. For example, you were laid off from your job or you have been sick and are temporarily unable to work. Get the name of the person you talk with and write a follow-up letter for your loan file. If you can't reach your lender by phone, put this same information in a letter and ask the lender to contact you. In either case, your letter to the lender should include the following information:

• Your name;
• Loan number;
• Property address;
• Your daytime and evening telephone numbers; and
• Brief explanation of why you are unable to make the mortgage payment.

Your lender (or servicer) will be willing to work with you, provided the lender believes you are acting in good faith (that is, you sincerely want to make your monthly mortgage payments and keep your home). Again, the lender will be more likely to consider repayment options if you have had a good payment history and you initiate contact at the outset.

b. Working with a housing counselor

If the lender thinks there is a reasonable chance that you can bring the mortgage current, the lender may refer you to a HUD-approved housing counseling agency in your community. A specially trained counselor will work with you to review your budget and establish a workable repayment plan that will enable you to bring your mortgage current.

Some lenders have their own internal counseling programs, however the NFCC recommends that you contact an NFCC HUD-approved housing counseling agency at (866) 557-2227.