If you cannot repay your mortgage, prioritize immediate communication with your lender. Options include negotiating a loan modification, forbearance, or refinancing to reduce payments. Sell the property if it is worth less than the mortgage balance (a 2023 Federal Housing Finance Agency report found 28% of homeowners faced negative equity). Explore bankruptcy as a last resort (11.3% of mortgage holders filed in 2022, per American Bankruptcy Institute). Seek free counseling through the Housing counseling agency (1-).

Lender negotiations are critical because 60% of mortgage holders who contacted lenders in 2023 avoided foreclosure (National Consumer Law Center). Forbearance plans, used by 2.2 million homeowners in 2020, temporarily pause payments but may extend the loan term. Selling under market conditions (median U.S. home price fell 15% from 2020 highs) can prevent further losses. Bankruptcy offers discharge of unsecured debts but impacts credit scores for 7-10 years (Federal Reserve data). Housing counseling agencies reduce default rates by 50% (U.S. Department of Housing and Urban Development). Proactive steps mitigate long-term financial harm, as 75% of mortgage defaults in 2023 resulted from delayed action (Consumer Financial Protection Bureau).