First Response

• Talk to your mortgage company as soon as you know you are about to fall behind, or as soon as you can if you have already fallen behind on your mortgage payments. The sooner you reach out to your lender and show your willingness to get back on track, the more willing the lender will be to work with you to make that happen.
  
  

Best Case

• Your options will vary depending on your financial situation and you lender, so it's important to be as honest as possible with your lender about your situation and ask about every option available to you. Some of these may include getting on a repayment plan where you continue making your monthly payments, with a bit of money tacked onto each payment to make up an amount in arrears, or tacking on missed payments to the end of your loan, essentially extending it by the number of months missed. Your lender may also allow you to do a short refinance, where part of the debt is forgiven and the rest is refinanced into a more affordable loan. A modification is similar, with the lender adjusting the loan terms to make repayment more feasible.
  
  

Worst Case

• If your lender will not offer you any of the above-mentioned options, you can move on to some other, albeit less desirable, alternatives. You can try to short sell -- or sell your home for less than is owed and have the remaining balance forgiven -- to avoid a foreclosure on your credit report. You can also do a deed in lieu of foreclosure, also called a voluntary foreclosure, in which you give the bank your home back willingly. This will impact your credit less than a foreclosure. A last resort is filing for bankruptcy. This will temporarily stop the bank from being able to foreclose on your home, but will haunt your credit report for 10 long years.
  
  

Role of Documentation

• Regardless of what option you are offered or choose to take, be prepared to provide plenty of documentation regarding your financial situation. This may include a detailed accounting of all your monthly bills, copies of recent bills, proof of income or unemployment, and tax documents. Make copies and keep the originals; it's not uncommon for such paperwork to get misplaced, so you may have to resubmit it at some point.