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Avoiding Foreclosure

Foreclosure is a legal process that takes place when a homeowner fails to make their agreed-upon mortgage loan payments. Several steps can be taken prior to foreclosure to prevent families from losing their homes. To better understand foreclosure, read "Foreclosure Process."

Getting Started

The U.S. Department of Housing and Urban Development (HUD) through the Federal Housing Administration (FHA) provides comprehensive information about how to avoid foreclosure with special emphasis on alternative arrangements that you may be able to reach with your lender. Read their Guide to Avoiding Foreclosure.

Foreclosure doesn’t happen overnight – it starts with financial difficulties. 

Ask yourself the following:

  • Has your financial situation changed due to an increase in your mortgage payment, a change in your family life, a medical emergency, job loss, or other reasons?
  • Are you using your credit card to buy groceries?
  • Is it becoming difficult to pay your bills on time?

As budgets collapse, mortgage payments are missed. It only takes a series of missed payments for the foreclosure process to begin. Whether you are struggling to pay your bills or are already missing payments, you can get help today.

What do I do when I can't pay my mortgage?

The Consumer Financial Protection Bureau lays out the first steps to take if you cannot pay your mortgage and the options that may become available to you during this time.

Call your mortgage servicer. Individuals should be able to find the phone number of their lender on their monthly mortgage loan statement or on the lender's website. If you do not know who your lender is, contact a HUD-approved housing counselor for assistance. You should be prepared to explain why you are unable to make your mortgage payment, whether this problem is temporary or permanent as well as details about your income, expenses and other assets. 

Call a HUD-approved housing counselor. Free or low-cost housing counselors can be found through the Department of Housing and Urban Development or through the Homeownership Preservation Foundation, an organization is dedicated to helping homeowners avoid foreclosure. The Homeownership Preservation Foundation’s HOPE Hotline is 888.995.4673 (open 24/7).

Stabilizing Urban Neighborhoods (SUN)

The SUN initiative works to stabilize neighborhoods by preventing foreclosure-related vacancies before they occur. SUN helps homeowners with a stable income stay in their homes by acquiring foreclosed properties and reselling these homes to their existing occupants with mortgages they can afford. To qualify for SUN, a homeowner needs to be (1) late on their mortgage, going through foreclosure or facing eviction due to foreclosure (2) live in New Jersey, and (3) have a stable income. To apply, homeowners can call SUN at 855.604.4663 (toll-free) or visit their website.

Mortgage Refinancing Options

  • The Stay at Home Streamline Refinance Program offers mortgage refinancing for struggling homeowners. Lenders can streamline refinances in several ways. To learn more about the streamline program, visit the above link or call HUD at 202-708-1112.
  • Mortgage refinance programs are available through the Neighborhood Assistance Corporation of America. This national non-profit community advocacy and housing services organization offers free counseling and will take you through the refinancing process. Learn more.

Mortgage Assistance for Military Personnel

Mortgage payment relief and protection from foreclosure are provided to active military personnel and reservists through the Servicemembers Civil Relief Act (SCRA). To be eligible for this program you must have had mortgage commitments before enlisting or being called to active duty. Eligible service members should contact their lenders and other creditors and provide documentation that they have been called to active duty and are eligible for certain relief under the SCRA. Contact your local JAG office for more information.

Emergency Financial Assistance

Homelessness Prevention Program - This program provides limited financial assistance to low and moderate-income tenants and homeowners in imminent danger of eviction or foreclosure due to temporary financial problems beyond their control. To learn more, contact the office in your area.

The Social Service for the Homeless (SSH) program provides assistance to New Jersey residents who are at risk of homelessness but are ineligible for Temporary Assistance for Needy Families welfare, General Assistance welfare or Emergency Assistance. If you are eligible for this program, SSH may pay for emergency food or shelter for a limited time and may also provide money for rent, mortgage, utility, and security deposit assistance. Learn more about SSH. Find your area's hotline number. 

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