We're a month late on our mortgage payment and my husband, who's self-employed, just had surgery and can't work for several months. We feel like our house payments are more than we can afford. We'd like to sell now rather than hanging on and going through a foreclosure. How much time do we have to sell?
Under federal laws that protect homeowners in foreclosure, in most cases, you must be over 120 days' delinquent before the loan servicer can initiate a foreclosure.
Once foreclosure starts, there's no automatic deadline to sell the property. The amount of time before the foreclosure is complete depends on whether the process is judicial or nonjudicial, and also varies among the different U.S. states. (To get an idea of how long the process might take, read our articles about your state's process. You can find them by clicking your state's link in our Key Aspects of State Foreclosure Law: 50-State Chart.) The longer the process takes, the more time you have to sell the property. (To learn where foreclosures take the longest, see States With Long Foreclosure Timelines).
Because you say that your mortgage payments are more than you can afford, you might consider applying for a loan modification, which could make your monthly payments more affordable. If you want to apply for a modification, call your servicer and ask for a "loss mitigation" application. (To learn what to do—and what not do—in the loan modification process, read Do's and Don'ts for Getting a Loan Modification.)
Also, your state might have a Hardest Hit Fund program that gives money to qualified homeowners so they can avoid foreclosure during a financial hardship. Be aware that the 18 states (and Washington, D.C.) that received money from the Hardest Hit Fund have until the end of 2020 to make use of their allocated money. But some states have closed their programs early because their funding ran out.
If you decide you still want to sell, and you can't sell your house for the full amount owed, your lender might agree to accept less, in what's called a "short sale." To get approval for a short sale, like with a modification request, you'll need to submit a loss mitigation application to your servicer.
If you need more information about how foreclosure works in your state and how long the process will take—or want to learn about possible defenses to a foreclosure in your situation, which could delay the process and give you more time to sell—consider talking to an attorney.