Intent to Foreclose Letter: 120-Day Rule, Cure Options, and Next Steps

An intent to foreclose letter is a formal warning from your mortgage servicer that your loan is in default and that foreclosure will begin unless you act by a stated deadline. Federal rules bar your servicer from sending it until you are more than 120 days past due, so by the time it lands in your mailbox, several missed-payment deadlines are already behind you. Receiving the letter does not mean you have lost your home. It means you still have a window, defined by the letter itself and by federal law, to cure the default or apply for an alternative that stops the foreclosure from moving forward.

What the Letter Must Include

Read the letter carefully before you do anything else. It identifies the specific default on your loan and typically states how many days your payment is past due. It also gives the total dollar amount needed to cure the default and bring the loan current, covering missed payments, accumulated interest, and any late fees or penalties that have accrued since your first missed installment. If that number looks wrong, you have the right to request verification.

The letter sets a cure date. This is the deadline by which you must pay the past-due amount to stop the process from advancing. Standard mortgage contracts generally give at least 30 days from the date of the notice, but the exact period depends on your loan agreement and your state’s laws. Some states require 45, 60, or even 90 days. If the cure date passes without payment, the servicer can invoke the mortgage’s acceleration clause, which makes the entire remaining loan balance due immediately rather than just the missed payments.¹

Expect the letter to include contact information for your servicer or its legal representative, with a phone number and mailing address you can use to discuss the debt, request a payoff statement, or ask about workout options. Many letters also reference your right of reinstatement, which typically lets you stop the foreclosure by paying the past-due amount plus fees at any point before the sale, rather than paying off the entire loan. The specifics vary by state.

How the Letter Reaches You

Servicers need a paper trail proving you received notice, so the most common delivery method is certified mail with return receipt requested. Many servicers also send a duplicate copy through standard first-class mail as a backup in case the certified delivery is refused or missed. In some cases a representative may physically post the notice on your front door or another visible spot on the property, particularly when mail delivery has been unsuccessful.

Ignoring the letter does not reset any deadlines. Courts generally treat a properly mailed notice as delivered whether or not you actually read it. Refusing certified mail delays nothing and helps no one.

The 120-Day Rule and What Should Have Happened Already

Before your servicer can make the first filing or send the first notice required to start foreclosure, your mortgage must be more than 120 days delinquent. This requirement comes from federal Regulation X, which applies to nearly all residential mortgage servicers nationwide.² The 120-day window exists so you have time to learn about workout options and submit an application for mortgage assistance.

The same regulation requires your servicer to reach out well before an intent to foreclose letter arrives. Your servicer must make good-faith efforts to establish live contact with you no later than 36 days after you miss a payment and inform you about available loss mitigation options. By the 45th day of delinquency, the servicer must send a written notice describing loss mitigation options, instructions on how to apply, a phone number for your assigned contact, and a link to HUD-approved housing counseling resources.³ If you never received that earlier outreach, document that fact. It may become a defense if your case reaches court.

What To Do Right Now

The worst response is no response. Every day of inaction narrows your options and adds fees to your balance. Take these steps in order.

Verify the numbers. Check the letter’s claimed past-due amount against your own records. Servicer accounting errors happen more often than you would expect, and paying a disputed figure without questioning it can waive your right to challenge it later. If the amount is wrong, contact your servicer in writing and request an itemized breakdown.

Call the loss mitigation department, not general customer service. Ask specifically about a loss mitigation application. Under federal law, if you submit a complete application before the servicer files the first foreclosure notice, the servicer cannot proceed with foreclosure while your application is under review.⁴ Even if foreclosure has already been filed, submitting a complete application more than 37 days before a scheduled sale stops the servicer from moving for a foreclosure judgment or conducting a sale until the review is finished.5

Once you submit a complete application, the servicer has five business days to confirm receipt in writing, note the date received, and explain the foreclosure protections you are entitled to while under review. The servicer then has 30 days to finish its evaluation and send a written determination of which options, if any, it will offer.⁵

Contact a HUD-approved housing counselor. These counselors are free. They can review your finances, help you prepare a loss mitigation application, negotiate with your servicer on your behalf, and refer you to legal aid if needed.⁶ Reach one through HUD’s toll-free number at 800-569-4287 or through the CFPB’s website. Never pay anyone who offers foreclosure help before providing services. Legitimate counselors do not charge upfront fees.

The Alternatives You Can Ask For

Loss mitigation is an umbrella term for any arrangement that helps you avoid foreclosure. Your servicer must evaluate you for every option you qualify for once you submit a complete application. The main alternatives split into options that keep you in the home and options that let you exit without a foreclosure judgment on your record.

Repayment plan. Your past-due amount is spread across several months of higher payments on top of your regular mortgage, letting you catch up without needing a lump sum.⁷
Forbearance. Your servicer temporarily reduces or suspends your payments for a set period. This fits short-term hardships like a job loss or medical emergency. You still owe the missed amounts and typically repay them through a repayment plan or modification afterward.⁷
Loan modification. The servicer permanently changes one or more terms of your loan to lower the payment. This can involve extending the loan term to 40 years, reducing the interest rate, or forbearing part of the principal balance.⁷
Short sale. You sell the home for less than what you owe. The servicer agrees to accept the sale proceeds as settlement, though you may still owe the remaining balance depending on your state’s laws and the servicer’s terms.⁷
Deed in lieu of foreclosure. You voluntarily transfer ownership of the property to the servicer in exchange for release from the mortgage. This avoids a foreclosure proceeding but still means giving up the home.⁷

Servicers generally consider options in roughly that order, starting with the least disruptive.

What Happens If the Cure Date Passes

If the cure date passes and you have not paid, submitted a loss mitigation application, or reached another arrangement, the servicer moves to the next phase. What that looks like depends on whether your state uses judicial or non-judicial foreclosure.

Judicial Foreclosure

In roughly half of states, the servicer must file a lawsuit in court. You will be served with a summons and complaint, and a judge oversees the entire process.⁸ This gives you the opportunity to raise legal defenses, such as arguing that the servicer failed to follow required notice procedures or did not properly evaluate you for loss mitigation. Judicial foreclosures typically take longer, sometimes a year or more.

Non-Judicial Foreclosure

In states that allow it, the servicer can foreclose without going to court by following a series of statutory steps. This usually involves recording a notice of default in the county land records and, after a waiting period, publishing a notice of sale that schedules a public auction. The timeline is faster than a judicial foreclosure and gives you fewer built-in chances to contest the process, though you can still file a lawsuit to challenge it.

Either way, the transition to formal proceedings adds costs. Attorney fees, court filing charges, and administrative expenses accumulate and are typically added to what you owe. The longer the process runs, the more expensive reinstating the loan becomes.

Extra Protection for Active-Duty Servicemembers

If you are on active duty or recently left active-duty military service, the Servicemembers Civil Relief Act adds protections that override normal timelines. For any mortgage you took out before entering active duty, a foreclosure sale is not valid during your service or within one year after you leave active duty unless a court specifically orders it. Violating this protection is a federal misdemeanor punishable by up to one year in prison, a fine, or both.⁹

These protections apply even if you never told your servicer about your military status.¹⁰ If you receive an intent to foreclose letter while on active duty, tell your servicer immediately and provide documentation of your service dates. A court can stay the proceedings or adjust the loan terms to preserve the interests of all parties.

Watch Out for Foreclosure Rescue Scams

Homeowners who have just received an intent to foreclose letter are prime targets for scam operators. Scammers monitor public default filings and reach out by mail, phone, or in person offering to “save your home.” These red flags mark a scam rather than a legitimate service:

Upfront fees. No legitimate foreclosure counseling organization will ask for money before providing services.¹¹
Deed transfer requests. A scammer may ask you to sign your deed over to a “third-party investor” with a promise you can lease the home back and repurchase it later. Once you sign, the new owner can evict you and is under no obligation to sell it back.¹¹
Instructions to stop paying your servicer. Legitimate counselors will never tell you to redirect your mortgage payment or stop communicating with your servicer.¹¹
Documents with blank spaces. If anyone asks you to sign paperwork with unfilled lines, walk away. Scammers fill those blanks in later with terms you never agreed to.¹¹
Guarantees and pressure. No one can guarantee they will stop your foreclosure. Unsolicited offers with urgent language and bold promises are a hallmark of fraud.

If you need help, contact a HUD-approved housing counselor directly rather than responding to anyone who contacts you first. Free counseling is available through HUD at 800-569-4287.⁶

1
Legal Information Institute. Acceleration Clause
2
Consumer Financial Protection Bureau. 12 CFR 1024.41 – Loss Mitigation Procedures
3
eCFR. 12 CFR 1024.39 – Early Intervention Requirements for Certain Borrowers
4
Consumer Financial Protection Bureau. 12 CFR 1024.41 – Loss Mitigation Proceduresa>
5
eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures
6
HUD Exchange. Providing Foreclosure Prevention Counseling
7
Federal Housing Finance Agency. Loss Mitigation
8
Consumer Financial Protection Bureau. How Does Foreclosure Work
9
Office of the Law Revision Counsel. 50 USC 3953 – Mortgages and Trust Deeds
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Consumer Financial Protection Bureau. As a Servicemember, Am I Protected Against Foreclosure?
11
FDIC. Beware of Foreclosure Rescue Scams