- Some lenders let distressed homeowners delay payments for a short time, known as forbearance, if the person can prove they will have funds to get completely caught up on payments in the near future. You can also ask to have portions of the delinquent amount added to your normal monthly payment if you have fallen behind due to a short-term financial hardship.
- The U.S. Department of Housing and Urban Development (HUD) offers free foreclosure avoidance counseling. The Federal Government also has ongoing programs to keep people out of foreclosure through refinancing and other loan modifications. Click on the HUD: Foreclosure Avoidance Counseling link in the Reference section to find HUD agencies in your state.
- You can sell your home on your own, and if fortunate enough, may even be able to pay off the entire mortgage with the proceeds and avoid foreclosure. Another option is to exercise what is known as a short sale. In a short sale, you end up selling the property for less than what is owed to the bank, and through a prearranged agreement, the lender accepts the money from the sale as a payoff on the mortgage.
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