OPTION 1: Bring the Loan Current (Reinstatement)
You pay everything you owe in missed payments and fees, which immediately stops the foreclosure process. After that, you continue with your normal monthly payment. The money can come from savings, family help, personal loans, or selling assets.
OPTION 2: Catch-Up Payment Plan
Your lender spreads the overdue amount across several months (usually 6–12) and adds it to your regular payment. This brings the loan back into good standing, but your monthly payment will be higher until the balance is fully repaid.
OPTION 3: Change the Loan Terms (Loan Modification)
The lender restructures your loan to make payments more affordable. This may include moving missed payments to the end of the loan, lowering the interest rate, extending the loan length, or adjusting how payments are calculated.
OPTION 4: FHA Partial Claim (FHA Loans Only)
Your original mortgage stays the same, but the missed payments are moved into a separate, zero-interest balance. You don’t make payments on that balance until you sell, refinance, or fully pay off the mortgage.
OPTION 5: Payment Deferral (Conventional, VA, USDA)
Your regular payment stays the same, and the overdue amount is added to the end of your loan. Unlike the FHA option, this does not create a second loan — it simply delays repayment until the mortgage is paid off or refinanced.
OPTION 6: Temporary Payment Pause (Forbearance)
The lender allows you to pause or reduce payments for a short time. When that period ends, you’ll need to choose another solution such as reinstatement, repayment plan, modification, partial claim, or deferral.
OPTION 7: Replace the Loan (Refinance)
If your credit and income qualify, you may be able to replace your current mortgage with a new one that includes the missed payments. This creates one fresh loan, but the payment may be higher if interest rates have increased.
OPTION 8: Voluntary Property Return (Deed in Lieu)
Instead of going through foreclosure, you transfer ownership back to the lender. This still impacts your credit, but usually less than a foreclosure, and it helps avoid additional legal costs. Buying another home may be delayed for a few years.
OPTION 9: Foreclosure
The lender sells the home at auction to recover what is owed. This has the most severe impact on your credit, stays on your record for several years, and can make it difficult to rent or qualify for future loans. In some cases, you may still owe money after the sale.
OPTION 10: Chapter 7 Bankruptcy
This temporarily stops foreclosure and collection activity, usually for a few months. However, it does not provide a long-term mortgage solution. Once the protection ends, foreclosure can continue unless another plan is in place. This remains on your credit for up to 10 years.
OPTION 11: Chapter 13 Bankruptcy
This option also stops foreclosure immediately, but includes a court-approved repayment plan that spreads missed payments over 3–5 years. As long as you follow the plan and make your regular mortgage payments, foreclosure cannot proceed.
OPTION 12: Short Sale
With lender approval, the home is sold for less than what is owed. This avoids foreclosure, but the process can take time and still affects your credit. Some lenders forgive the remaining balance, while others may seek repayment.
OPTION 13: Sell Before the Auction
Selling before foreclosure can protect your credit and give you more control. There are three common ways to do this:
Traditional Listing: Best if you have enough equity to cover the loan balance, missed payments, agent fees, closing costs, and any needed repairs. Sales can take several months.
Cash Sale to an Investor: An investor pays off the loan and closing costs. This can happen quickly, but usually requires some equity for the numbers to work.
Creative Finance Sale to an Investor: An investor brings the loan current and takes over monthly payments while the loan stays in your name. The deed transfers to the investor, and foreclosure stops immediately. Over time, consistent payments can help your credit improve, and you may qualify for another home loan within 6–12 months. When the property is later sold or refinanced, your loan is fully paid off.
