Help! I'm Facing Foreclosure. What are my options?


Many homeowners don’t understand that mortgage companies don’t want to foreclose on properties unless they have to. They are in the business of loaning money, not foreclosing on homes. So what can you do to help keep your home?

Contact the Mortgage Company as Soon as Possible

Once again, the mortgage company doesn’t want your house, they want to receive your mortgage payments. They know that homeowners periodically run into financial difficulties, so call them to see if they can help. When you call, ask them about:

  • Special Forbearance. If you have a temporary hardship that has caused you to fall behind on your mortgage payments, the mortgage company may give you a forbearance which will let you keep your house until your financial situation improves.

  • Partial Claim. The FHA can make a one-time payment to bring your mortgage current if you are also able to resume making full mortgage payments.

  • Mortgage Modification. Your mortgage company has the option of refinancing your loan at a lower interest rate and/or extending the length of the loan term.

  • Pre-foreclosure sale (PFS). Under this program, sellers are allowed to sell their homes and apply the net sale proceeds to the mortgage loan, even though the net proceeds are less than the amount owed on the mortgage.

  • Deed-in-lieu of foreclosure. This is where the homeowner is allowed to voluntarily transfer the property back to the mortgage company in exchange for the mortgage companies release from the mortgage loan and payments.

Open All Mail and Answer All Telephone Calls From Them

The first letters sent to you will most likely provide ways to prevent foreclosure on your home. The last thing you want to do is ignore the letters and phone calls you get from the mortgage company. If you appear to be ignoring them, they will think you don’t care.  You want them on your side, not against you. Besides, you want to be able to show up in foreclosure court and say you did everything you could to keep your home.

Know Your Legal Rights

Find, read, and thoroughly understand your loan documents. The documents explain what your mortgage lender can do when you don’t make your payments on-time. Make sure to contact your state government housing office to see if they can provide you with any helpful information.  They can provide you with and help you understand the foreclosure laws, and how the laws affect the foreclosure process.

Contact the Federal Housing Authority (FHA).

One of the missions of the Office of Housing is to maintain and expand homeownership. The FHA can provide information on how to prevent foreclosure. Detailed information can be found at, or you can call them at 1-800-CALL-FHA.

Contact HUD for Help

The U.S. Department of Housing and Urban Development can provide help. HUD sponsored housing counseling agencies throughout the country to provide free or low-cost advice. They can: help you to understand the foreclosure law; organize your finances; speak to your mortgage lender for you if necessary. They can be reached at 518-569-4287 or

Reallocate Your Spending

Your home is one of the most important things in your life, after your health. Take a close look at where you spend your money and think about how to save. Collaborate with someone and have them help you figure out what to do.  How about; canceling your cable TV; lowering the thermostat in the winter and raise it in the summer; cooking at home instead of eating in restaurants; walking or bicycling to work instead of driving; canceling unnecessary memberships; calling credit card companies to have your payments reduced, and transferring credit card balances to low-interest cards. There are many ways to save money, it just takes a little time and effort to figure out how.

Sell or Borrow from Your Assets

Do you have any personal assets that can be sold? Items in storage, jewelry, a boat or second car? Can you or your spouse get a part-time job to help with the mortgage payment? What about retirement or savings accounts, can you take money from them until you are back on your feet?

Foreclosure can be a daunting experience for homeowners. That is why many homeowners speak to foreclosure attorneys about their options. Foreclosure attorneys that are well versed in real estate law can help protect homeowner’s rights and assist in negotiations with mortgage lenders. What are you waiting for?

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