Foreclosure Options: What's Actually Available

The worst outcome in foreclosure is finding out which options were available to you after the windows have closed. Here are every real path, when it's available, and who you need to contact to access it.

The options, in order of when they're typically available

• Reinstatement. Bring the loan completely current by paying everything past due in a lump sum. The loan continues as if you'd never missed a payment. This option is typically available until shortly before the foreclosure sale. Requires access to funds — a family loan, retirement account withdrawal, or other asset.
• Repayment plan. Your servicer agrees to let you pay the missed amounts over several months, added to your regular payment. Less flexible than a modification but sometimes easier to qualify for.
• Forbearance. A temporary pause or reduction in payments. Buys time but not forgiveness — the missed amounts must be repaid. Appropriate when the hardship is temporary.
• Loan modification. A permanent change to your loan terms — rate, term, or balance — to make payments sustainable. Requires servicer approval and documentation. This is the most powerful option for someone who wants to keep the house and has a sustainable income.
• Short sale. Sell for less than the mortgage balance with the lender's approval. The lender may forgive the deficiency or pursue it — depends on your state and the agreement. Available when there's no equity and you don't want to keep the house.
• Deed in lieu of foreclosure. Transfer the property to the lender voluntarily. Less damaging than a full foreclosure on your credit, and faster. Lenders don't always accept this, especially if there are other liens.
• Sell before the auction. If there's equity, a normal sale before the foreclosure completes is almost always the best option — you capture the equity, pay off the loan, and avoid the full credit damage of a completed foreclosure.
• Bankruptcy. An automatic stay stops a foreclosure sale immediately. This is a tool with significant consequences of its own — talk to a bankruptcy attorney.

Who you should call first

The two best first calls are your servicer's loss-mitigation department and a HUD-approved housing counselor (1-888-995-HOPE). Both are free or close to it. HUD counselors can contact your servicer on your behalf, help you understand your options, and navigate the process. They see this every day; you're doing it once.