The prospect of losing your home to foreclosure is one of the most difficult challenges that any family can face. Making the right decision for your circumstances is not easy, but we can help. We hold the certification of Certified Distressed Property Experts, (CDPE) and can offer the type of information you need to help make an informed decision about your family’s financial future.

If you are struggling with your finances and fear that you may lose your home, here are a few of the foreclosure avoidance options for you to consider. Some require lender approval and others do not. We always encourage homeowners to seek legal and tax advice before selecting any of these options.

1. Short sale.  This is when a lender agrees to accept a loan pay-off that is less than (short) what the bank is owed by the homeowner.  It is a dignified alternative to foreclosure that allows the homeowner to sell his property at a price that is less that the amount owed to the bank. A successful short sale means an owner may apply for a new mortgage in just 24 months instead of 5-plus years following a foreclosure.
2. Deed in lieu. This allows the homeowner to give the property back to the lender rather than go through the process of foreclosure. It’s often called a “friendly foreclosure.”
3. Forbearance or repayment plan. This involves the home owner negotiating with the lender to allow them to repay delinquent mortgage payments over a period of time.
4. Mortgage modification. This is a reduction of one of the following: the interest rate, the principal balance of the loan, the term of the loan, or any combination that will achieve a more affordable mortgage.
5. Renting the property. This is a good option for the homeowner if his mortgage balance is low enough to be covered by rental income. Lender approval is not required.
6. Bankruptcy. This option varies from state to state and according to circumstance. Entering bankruptcy is a costly and risky process that requires the advice of an experienced and qualified bankruptcy attorney.
7. Mortgage refinance. If the owner has enough equity in the property and good credit, this is a viable option.
8. Service Members Civil Relief Act. This was implemented to address the needs of military families experiencing financial distress due to deployment. The American Bar Association has a network of attorneys that can assist service people in securing this relief.
9. Sale of the property. With sufficient equity and a knowledgeable agent, this is a good option for a homeowner. However, without equity, a short sale may be the next best option.
10. Reinstatement. This is a simple way to avoid foreclosure; however, it is the most difficult option for owners already strapped financially. Here the owner pays the outstanding mortgage balance including all late fees to reinstate his mortgage – right up to the day before the foreclosure sale.