Your Options For Dealing With A Foreclosure Situation On Your Home

If you have neglected to pay three or more mortgage payments on your home and your lender has sent you a Notice of Default, then it's important to understand this doesn't automatically mean you will lose your home to foreclosure. While you may be stressed out and unable to see them, you actually have many options to deal with the situation, including each of the following:

Make an Alternative Payment Arrangement With Your Mortgage Company

While it may not seem like it, the last thing your mortgage company really wants to do is complete the foreclosure process and take your home. Sometimes a simple phone call asking to make an alternative payment arrangement is enough to stop the foreclosure process.

List Your Home for a Short Sale

If you owe more on your home than it is currently worth in the open market but want to sell it, then you have the option of listing it for sale with a realtor and working out a short sale with the mortgage lender. With a short sale, your lender agrees to the price you and the buyer agree on for the home, and if the mortgage exceeds this total, then the mortgage lender will write off the balance rather than trying to collect it from you. 

Offer Your Home to the Lender via a Deed in Lieu of Foreclosure

If you do not have any equity in your home and prefer to simply get out of the house so you can move on with your life, then you always have the option of offering your home to the lender via a deed in lieu of foreclosure. If the lender agrees, you can sign over your home to your mortgage company, send them the keys, and in exchange, they will agree to cancel your mortgage. The advantage of a deed in lieu of foreclosure is that it keeps the foreclosure situation off of your credit report. 

Hire an Attorney and File for Bankruptcy Protection

While a bankruptcy won't eliminate your mortgage or its past due payments, the bankruptcy trustee can work with your lender on a plan to make extra payments and get things back on track.

Typically, people who have suffered an illness or temporary job loss will file for bankruptcy simply to stave off the foreclosure process until they can get their financial lives back on track. If this fits your situation, then hiring a foreclosure defense lawyer and exploring the option of filing for bankruptcy protection should be high on your list of options.


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