Foreclosure Alternatives

Various mortgage foreclosure alternatives are available depending on your personal situation.

Special Forbearance

This means that the lender will work with you and allow you to skip a few payments. You might be able to arrange this if you've lost your job or have had a sudden increase in your cost of living. You'll need to prove that you'll be able to keep your part of a new payment plan.

Refinancing

This means that you would refinance your mortgage and possibly extend the length of the mortgage. Your payments would be lower. To get this arrangement, you'd have to proved that you've recovered from your financial setback.

Pre-Foreclosure Sale

Believe it or not, you can do this to sell your home for less than the amount of the mortgage. This could be the case if increased interest rates have lowered the market value of your home.

You might be able to do this if:

• Your payments are at least two months late
• You can sell your home within three to five months
• a lender appraisal shows your home's value meets HUD guidelines

FHA Insurance Fund

You might be able to get financial help from the FHA once to catch up on unpaid mortgage payments. You might qualify if

• your payments are between four and twelve months late and ...
• You can return to make regular mortgage payments

You'll have to sign an interest-free promissory note secured by a lien on your property. This note must be paid when you sell your home or when you pay off your first mortgage.

Deed in lieu of foreclosure

This foreclosure alternative means that you turn over the house to the lender and walk away with your credit intact. This would be your last resort solution. It's better than owing money and losing your credit standing after losing your home.

You might qualify for this if

• You've defaulted on your mortgage
• You don't qualify for any of the above options
• You tried to sell your home but couldn't do it
• You are current with any other FHA loans

Active Military Service

Military home owners may qualify for a reduced interest rate. This could reduce your payments dramatically.

There are numerous foreclosure alternatives available in addition to the above. Please contact us if you would like some help.

Return to the foreclosure prevention page from the foreclosure alternatives page.