You have options when you fall behind on your mortgage payments and face the possibility of foreclosure. Depending upon how much you are in arrears of your loan, gathering enough money to pay back missing mortgage payments, interest and penalties is the first place to focus if you want to keep the home. Family members, retirement funds, and other financial resources are the best place to start if they haven’t been depleted. If this option exists, you should consider asking your lender for the opportunity to “reinstate” your loan to current status.

Reinstatement: If you can get funds to pay the loan current, you would use the approach of Reinstatement. Reinstatement lets you pay back the past due debt as a lump-sum. Your lender would provide you with the payment amount which would include missed payments, interest, and penalties and give a deadline date to pay it.

Incident-Related Default:

If you fell behind on your loan payments due to an “incident” eg, an illness, loss of job, accident…and you will be able to eventually get yourself back to a place you were before, then seeking relief and working to stay in the home makes the most sense.

Short Refinance: Lenders can negotiate a “short refinance” of your current loan where they would consider forgiving some of the debt and restructure the balance into a new loan.

Another option would be Forbearance. You can also ask for a period of forbearance from your lender where they will agree to reduce or suspend your mortgage payments until you are back on your feet. They would put the missed payments on the back of the loan most likely. This has been a wide-spread and successful approach during the pandemic to account for the economic disruption that lock downs and impacts of the virus have costs many homeowners.

The CARES Act directs that if a residential borrower is experiencing financial hardship due to COVID-19, they can be granted forbearance on your federally-backed mortgage loan for up to 180 days, with the option to extend for another 180 days (potentially relief for a total of 360 days). A moratorium on evictions and foreclosures was extended until at least March 31, 2021 by President Biden’s executive order signed on Jan. 20, 2021.

Lifestyle-Related Default:

Often when facing foreclosure, you have already tapped other resources to stay afloat and there isn’t anywhere easy to turn to find a way to make up missing payments and bring the loan current. If your income or employment are not going to quickly get you back to normal or what income you generate in the future won’t be enough to help you “stay” current, then options to pay and stay might not be the best approach.

If you want to stay, and have income but perhaps less than before, you can attempt Mortgage Modification. This is where you look to refinance your mortgage and/or extend the term. Your lender might then reduce your monthly mortgage payments to a level that are more within your means. The key here would be that you would be able to show your lender that you were able to continue to make your payments…albeit lower payments reflecting your lower level of income.

Chronic Default:

If the ability to pay your mortgage for the foreseeable future is questionable, and you don’t expect to be able to get your income up to prior levels or at least generate some income to stay in the home with restated loan terms, then looking for a good exit strategy to sell your home and use the equity to start over and re-group make sense.

If your home can sell prior to the foreclosure action leading to you losing the home, you should. Listing your home with a real estate agent and selling it quickly is an optimal solution. The problem can be that if the home needs work, and/or you are relying on a buyer to close your sale before a particular timeframe…there is risk. What if the buyer doesn’t buy in time? Their loan falls through, the inspection goes poorly and the buyer terminates? These are risks that can lead to foreclosure even when the house is “under contract.”

Another main-stream option is to sell the home “direct” to a professional home buyer company like Resideum. These types of companies usually buy homes as-is and close quickly with cash or private money financing. They typically don’t offer full retail value but often by avoiding costly repairs that you can’t do, real estate commissions you don’t have to pay, and the certainty of a sale on your timeline, they are a very viable option.

You can ask your lender to consider a “Short Sale.” This is where you are able to find a buyer for your home but the sale proceeds from selling it won’t cover the mortgage. You will need the lender to agree to accept “Less” than owned to let you sell the home. Lenders will consider these types of sales but they can often take lots of time to get approved and often you can only be behind a certain amount and you will have to sell your home in a specific timeframe.

Sell to a Friend and Rent Back

If you can’t bear to move out, you could try to sell your house to a friend or an investor who will then lease the home back to you. You would sign a lease and also negotiate the “option to re-purchase” the house at a later date. This gives you the right to buy back your home once your finances have improved. This option could work but you would need to get back into a position where you could get new financing and you would need to negotiate terms that you can live with for re-purchase price and timeframes. If you don’t re-purchase per your arrangement, you could end up being forced to move out when your lease expires.

Things that DON’T work well

Allowing the home to go to foreclosure is devastating to your financial situation, credit and psyche. Considering things like Bankruptcy to stop foreclosure likely won’t. Bankruptcy typically only “delays” the foreclosure. If you can’t recover in such a way to make the payments by reorganizing your debts, then a bankruptcy court will release the house from the bankruptcy action to allow the lender to foreclose it.

Offering a Deed in Lieu could avoid the “foreclosure” on your credit report but the damage to your score will be essentially as bad regardless so this is simply a less formal, more dignified way to give the home back to the lender on your terms rather than theirs…and the sheriffs.


If you want to explore selling your home as-is to a professional home buyer and close before foreclosure date, reach out to Resideum today. We can get you an all cash, no-obligation offer you can consider today.

Get Your Free Offer TODAY!

We buy houses in any condition. No realtors, no fees, no repairs, no cleaning. Find Out How Much We Offer For Your House In Cash!

Get Your Cash Offer today!

  • This field is for validation purposes and should be left unchanged.

Looking for More Resources?

If you are facing foreclosure and want to learn how to stop foreclosure now?  We want to help. We’ve created free online guides to help homeowners just like you find out your options on getting out of the sticky situation you’re in right now. While these guides are helpful, sometimes talking out your options is better and we are here to help.

You aren’t the first person to go through a foreclosure… and won’t be the last.  So don’t feel ashamed. It happens.

The best thing you can do right now is to educate yourself on your options.  For some people selling your home is the best option (we’ll make a fast, fair and free all-cash offer on your Atlanta area house today, just let us know about your situation here <<), sometimes we’re able to help homeowners STOP FORECLOSURE completely, and sometimes there are other options.  So, click one of the buttons above to get your free foreclosure guide.

Resideum can help you stop foreclosure by buying your house fast for cash.