Options When You Are Behind on Your Mortgage Payments

Fair & Quick Home Buyers buys houses for cash from homeowners behind on their mortgage anywhere in the United States. We make a no-obligation cash offer within 24 hours, and we can close in as little as 7 days. You pay no agent commissions and no repair costs. The sale pays off your loan balance, arrears, and late fees at closing.

Updated June 2026 | By the Fair & Quick Home Buyers Team

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What actually happens when you fall behind on mortgage payments?

When you miss a mortgage payment, the clock starts. Most servicers will not report a late payment to the credit bureaus until you are 30 days past due. At 90 days, the account is classified as seriously delinquent and collection activity intensifies. At 120 days, federal mortgage servicing rules allow the servicer to begin the formal foreclosure process. The Consumer Financial Protection Bureau states: "Generally, the legal foreclosure process can't start until you are at least 120 days behind on your mortgage."

The 120-day window is not a trap. It is a required waiting period designed to give you time to resolve the problem. How you use that time determines your outcome.

What is the difference between pre-foreclosure and foreclosure?

Pre-foreclosure begins after you receive a formal default or acceleration notice, usually around 90 to 120 days past due. The property is in default but still legally yours. You still have the right to sell it, catch it up, or pursue a workout option with your lender. This is the window where a cash sale moves fastest.

Foreclosure proper is the legal process where the lender takes action to sell the property to satisfy the debt. In judicial foreclosure states, the lender files a lawsuit. In non-judicial states, a trustee follows statutory notice and sale procedures. Once the foreclosure sale happens, your ownership is typically extinguished. Selling the home before that sale date stops foreclosure from completing.

The national average foreclosure timeline from first public notice to completion was 671 days in the first quarter of 2025, according to ATTOM data. The range by state is dramatic: New Hampshire averaged about 110 days, while Louisiana averaged about 3,038 days. Non-judicial states tend to move much faster than judicial ones.

What happens to your missed payments when you sell the house?

This is one of the most misunderstood parts of the process.

When you sell your house, the title company prepares a payoff statement from your lender. That statement includes the principal balance, accrued interest, all missed payments, late fees, and any foreclosure attorney costs already added to the loan. The cash from the sale pays all of that at closing. You do not write a separate check for the arrears. They come out of the sale proceeds.

If your sale price covers the full payoff amount, the mortgage is retired and the foreclosure stops. If there is money left after the payoff and closing costs, you receive it. If the property is worth less than the total owed, a short sale requires lender approval to accept less than the full amount.

A cash buyer does not pay your arrears separately. The purchase price funds the closing, and the closing agent distributes those funds to satisfy everything owed. The key question is whether your home has enough equity to cover the payoff.

For a quick comparison of the main paths:

• Selling for cash: closes in as little as 7 to 21 days, pays off the full loan including arrears at closing, stops foreclosure, no commission, no repairs. Requires enough equity to cover the payoff.
• Traditional listing: closes in 30 to 90 days on average, 5 to 6 percent agent commissions, buyers expect repairs or credits, uncertain timing against a foreclosure deadline.
• Forbearance: temporarily pauses or reduces payments, arrears repaid later, does not reduce what you owe, requires lender approval and hardship documentation.
• Loan modification: permanently changes loan terms (rate, term, or balance capitalization), requires a full loss-mitigation application and typically a 3-month trial period, can take 90 or more days to finalize.
• Short sale: lender accepts less than the full payoff, requires written lender approval, typically takes 3 to 6 months, may still result in a deficiency judgment depending on state law and the written agreement.
• Deed in lieu of foreclosure: you sign the title back to the lender voluntarily, lender cancels the foreclosure, may include relocation assistance, still appears as a serious event on your credit report.

What are your real options, step by step?

Option 1: Contact your servicer immediately

The single most important step is calling your servicer before or at the first missed payment. The loss-mitigation department handles workouts. Servicers are required under federal rules to tell you what options are available before starting foreclosure. Options they may offer:

1. A repayment plan that spreads arrears over several months on top of your regular payment.
2. A forbearance that temporarily reduces or suspends payments, with a plan for what happens to the missed amounts at the end.
3. A loan deferral that moves missed payments to the end of the loan term so you resume normal payments without a large lump sum.
4. A loan modification that permanently lowers the rate, extends the term, or capitalizes the arrears into the balance.

Option 2: Reinstate the loan

Reinstatement means paying everything you owe in one lump sum to bring the loan fully current. Your servicer provides a reinstatement quote that includes all missed payments, late charges, and any fees the lender has added. Once you pay that amount by the stated deadline, the loan is current and foreclosure stops. The Federal Trade Commission identifies reinstatement as a viable path when your financial problem is temporary.

Option 3: Sell the home before the foreclosure date

If you have equity and cannot catch up, selling is often the cleanest resolution. A cash sale can close in 7 to 21 days. A traditional listing averages 30 to 90 days plus time in escrow. Either can work if done well before the auction date. Tell your servicer you are under contract so they know a resolution is coming. That communication can help preserve your timeline.

Selling before foreclosure avoids:

• A foreclosure entry on your credit report, which stays for 7 years.
• A potential deficiency judgment in states where lenders can sue for the gap between the sale price and the loan balance.
• The loss of any equity you have built.

Option 4: Short sale

If the home is worth less than you owe and you cannot make up the difference, a short sale lets you sell with the lender's approval to accept less than the full payoff. The process requires a full application package, lender review, and written approval before closing. Total time is commonly 3 to 6 months. Ask in writing whether the lender agrees to waive any deficiency.

Option 5: Deed in lieu of foreclosure

You sign the title to the lender voluntarily in exchange for canceling the foreclosure. The lender usually requires the property to be vacant and title to be clear of junior liens. Some lenders offer relocation assistance. This option appears on your credit report similarly to a foreclosure but avoids the full legal process.

What does a cash sale look like when you are behind on payments?

Here is how the process works with Fair & Quick Home Buyers:

1. Tell us about the house. Enter the address, condition, and your timeline. It takes about a minute.
2. Get a preliminary cash range to your phone, usually within 24 hours.
3. Someone from our team takes a quick look at the property and confirms the exact number.
4. If you accept, we open escrow and order a title search. The title company gets the full payoff statement from your lender, including all arrears and fees.
5. You pick the closing date. We can close in as little as 7 days.
6. At closing, the sale funds pay the lender's full payoff. If there is money left, you receive it. You walk away with the mortgage resolved.

You fix nothing, clean nothing, and pay no commissions. We buy as-is.

What is the impact on your credit?

Missed mortgage payments are already on your credit report once you are 30 or more days late. The question is what happens at resolution.

A completed foreclosure stays on your credit report for up to 7 years from the date of first delinquency. Lenders treat it as one of the most severe mortgage events. Score drops of 100 or more points are commonly cited by credit industry sources, though the exact impact depends on your starting score and overall credit profile.

A short sale reported as "settled for less than full balance" is also a serious derogatory event and can remain on your report for up to 7 years. The impact is often somewhat smaller than a completed foreclosure, particularly if you had fewer missed payments before the sale closed.

A cash sale with full payoff pays the mortgage in full. Your report will still show the prior late payments, but there is no foreclosure notation, no "settled" notation, and no deficiency. Resolving the debt with a full payoff is substantially better for your long-term credit profile than a foreclosure or short sale, even if the missed payments leave a mark.

How much will you get for your house?

Your offer from Fair & Quick Home Buyers is a preliminary cash range, not a guaranteed price. We base the range on the condition of the home and recent comparable sales in your area, then confirm it after a quick property review. We share the range within 24 hours. It is an estimate, subject to review.

If your home has equity above the payoff amount, a cash sale returns that equity to you while stopping the foreclosure. If you are close to breakeven, we can walk through the numbers honestly so you understand what closing looks like before you commit. There is no obligation and no pressure.

There are no agent commissions on your side. No repair costs. No cleanup. We buy as-is.

Frequently asked questions

How many mortgage payments can I miss before foreclosure starts?

Under federal mortgage servicing rules, a servicer generally cannot start the formal foreclosure process until you are more than 120 days past due on your mortgage. The Consumer Financial Protection Bureau confirms this threshold. That said, late fees and credit reporting begin at 30 days past due, and collection activity typically intensifies around 90 days. Contact your servicer before 120 days to preserve your options.

Can I sell my house if I am behind on mortgage payments?

Yes. Being behind on your mortgage does not prevent you from selling your house. You can sell at any point before the foreclosure sale date. The sale proceeds pay off the full loan balance, including arrears and any late fees, at closing. You receive any remaining equity. A cash sale can close in as little as 7 days, which matters when the foreclosure timeline is pressing.

What happens to my missed payments when I sell?

Your missed payments, late fees, and accrued interest are included in the payoff statement your lender provides to the title company at closing. The sale funds pay that total amount. You do not pay the arrears separately. If the sale price is high enough to cover the full payoff and closing costs, the mortgage is retired in full and the foreclosure stops.

Will a cash sale stop a foreclosure?

Yes, a cash sale that closes before the foreclosure auction date and pays the lender's full payoff amount will stop the foreclosure. The lender's debt is satisfied at closing, and there is no foreclosure to complete. Tell your servicer you are under contract so they are aware a resolution is in progress. Timing is critical: the sale must close before the auction date.

Do I pay commissions or fees when I sell to a cash buyer?

No. You pay no agent commissions and no repair costs when you sell to Fair & Quick Home Buyers. We cover standard closing costs. You bring nothing to the table, fix nothing, and owe no fees. The cash range we discuss is the basis for your net proceeds after the payoff is settled.

How does a cash sale affect my credit compared to foreclosure?

A cash sale that pays off your mortgage in full stops the damage from getting worse. Your credit report will still show the late payments that have already been reported, but there is no foreclosure notation and no "settled for less" notation. A completed foreclosure stays on your credit report for up to 7 years and is treated as one of the most severe mortgage events by lenders. Resolving the debt with a full payoff is significantly better long-term than a completed foreclosure.

What if my house is worth less than I owe?

If the home is underwater, a standard sale may not cover the full payoff. In that situation, you have three main paths: a short sale (lender agrees in writing to accept less than the full amount owed), a deed in lieu of foreclosure (you sign the title back to the lender), or continuing to pursue a loan modification or forbearance. Contact us for a no-obligation range. We will tell you honestly whether a sale makes sense in your situation and what the numbers look like.

Related resources

We buy houses across the country. See our full US hub for cash home sales for cities we serve. If you are facing another difficult situation, read our guides on selling a house during divorce and selling a house that needs repairs.

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Get your preliminary cash range for your house. Enter your address, tell us the condition and your timeline, and we will send your cash range to your phone. It takes about a minute. The range is an estimate, not a final offer. Someone from our team confirms the exact number after a quick look at the property.

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