Options that may help you keep the home
Home-retention options are generally built around a sustainable payment and a way to resolve the past-due amount. Some are temporary and others permanently change the loan.
- Repayment plan: adds part of the past-due amount to regular payments for a set period.
- Forbearance: temporarily pauses or reduces payments, followed by a plan for what was missed.
- Loan modification: permanently changes one or more mortgage terms.
- Partial claim or deferral: moves eligible past-due amounts to a separate balance due later for certain loans.
Options when keeping the home is not workable
A planned transition may be less damaging than an avoidable foreclosure, but it still deserves careful review. Ask about tax consequences, remaining debt, relocation assistance, credit reporting, and the effect on any second mortgage or lien.
- Traditional sale: sells the property and pays the mortgage from proceeds.
- Short sale: the servicer approves a sale for less than the total balance under defined terms.
- Deed in lieu: the homeowner voluntarily transfers title to the mortgage holder.
Questions that help narrow the path
Before choosing an option, be candid about income, the condition and value of the property, other liens, the size of the delinquency, and whether the regular payment is affordable again. A temporary setback calls for a different solution than a permanent loss of income.
- Can the household afford the regular payment now?
- Was the hardship temporary or ongoing?
- Is the property worth more or less than the total debt?
- Is a foreclosure sale already scheduled?
- Is the loan FHA, VA, USDA, Fannie Mae, Freddie Mac, or privately held?
Use independent help alongside the servicer
Your mortgage servicer is the source for account-specific options. A HUD-approved housing counselor can help you understand the process and organize an application. A licensed attorney can advise you about state law, court papers, bankruptcy, defenses, and deadlines.
- Get every offer and denial in writing.
- Do not pay for a guaranteed outcome.
- Do not send mortgage payments to an unfamiliar third party.
- Do not transfer title without independent legal advice.