The three main paths: stay, sell, or get free counseling first
When you are behind on your mortgage, it can feel like there is only one outcome. In reality, most homeowners have several paths to consider. It can help to think of them in three groups. None is guaranteed, and the right choice depends on your finances, your goals, and your timing.
Path 1: Stay and work it out with your lender
If you want to keep your home and your income can support a payment, you may be able to work something out with your servicer. Common tools include a loan modification (permanently changing your loan terms), forbearance (a temporary pause or reduction), a repayment plan (catching up over time), or reinstatement (paying everything past due at once).
Ask your servicer for a loss mitigation application, fill it out completely, and send it as early as you can. Keep copies and proof of delivery. Approval is never guaranteed, and terms vary by lender.
Path 2: Sell and protect your equity
If your home is worth more than you owe, selling on your own terms may let you pay off the loan and keep the difference. That money could help you move, rent, or start again. Waiting until the last minute can shrink this option, because selling takes time.
If you owe more than the home is worth, a short sale, with your lender's approval, may be an alternative to foreclosure. Try our equity check for rough numbers, and an Equity Guard Agent can give you an honest, no-pressure opinion of your home's value.
Path 3: Get free counseling first
If you are unsure which path fits, starting with a free HUD-approved housing counselor is a wise first step. Counselors can review your budget, explain the programs available to you, and help you communicate with your servicer. Many speak Spanish. See our free help page.
You can explore more than one path
These paths are not always either-or. Many homeowners apply for a modification while also learning what their home might sell for, so they have a backup plan. Talking with a counselor and an Equity Guard Agent at the same time is common.
Compare every option in detail on our options page, and check your stage with the timeline tool.
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No upfront fees
In California, it is illegal for anyone to collect a fee for loan modification or other mortgage relief services before the work is fully done (Civil Code section 2944.7). If someone asks you to pay first, walk away and talk to a free HUD-approved counselor.
Talk to an Equity Guard Agent
If you would like someone to listen and help you think through your situation, an Equity Guard Agent is happy to talk, free and with no pressure. We cannot promise any outcome, and we will always point you to free counselors and attorneys when that is the right next step.
Informational only, not legal advice. This article is general information about California foreclosure and is not legal, tax, or financial advice. Laws and programs change, and every situation is different. Please confirm details with your servicer, a HUD-approved housing counselor, or a licensed attorney.