Skip to main content
Find a Lawyer
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

How to Avoid Foreclosure

If you're having trouble making your mortgage payment, it is best to seek assistance as soon as possible. Waiting may eliminate available options and delay help. If your lender repossesses your home, it will not only negatively affect your credit rating, but if your home is worth less than the mortgage amount, it may result in a deficiency judgment against you. Below are some suggestion of how to avoid foreclosure.

Talk to a Foreclosure Prevention Counselor

Foreclosure prevention counselors can provide a borrower with important information on how to avoid foreclosure and can help the borrower create a plan. HUD-approved nonprofit housing and credit counseling agencies provide free advice and can help determine whether a loan modification or a refinance program applies. If eligible, the counselor may collect financial information from the borrower and send it to the lender. Visit HUD's web site for a list of approved housing counselors.

Be wary of counseling agencies that charge a fee for advice or offer to "rescue" a borrower from foreclosure. Many scam artists prey on desperate consumers by providing fraudulent services. Depending on the scam, some offer free help, while others charge a fee. If an agency, for instance, asks a borrower to pay for a loan modification or tells the borrower to send their mortgage payment to the agency instead of the lender, the agency is engaging in illegal and/or deceptive practices.

Work Out a Plan with the Lender

Many lenders are willing to work with borrowers that are having trouble making their mortgage payment in order to help the homeowner avoid foreclosure. Contact the lender to discuss the following suggestions for how to avoid foreclosure:

  • Forbearance: A lender may temporarily reduce or suspend a borrower's mortgage payment for a limited time. The borrower will have to repay the missed payments later. This option is often available to a borrower that can demonstrate that extra money, such as a bonus or a tax refund, will be available in the future.
  • Loan Modification: This agreement changes the original terms of the note in order to make the mortgage more affordable.
  • Reinstatement: This plan allows a borrower to repay missed payments within a specific time. This plan is often used in conjunction with a forbearance.
  • Repayment Plan: This plan allows the borrower to repay a portion of the delinquent amount each month with the mortgage payment.
  • Refinance: This option is available when there is enough equity in the home to pay off the old mortgage, late fees, and attorney fees with a new mortgage.

A lender may also offer other options. It is important to check with the lender to learn how you can avoid foreclosure.

Get Help from the Government

The U.S. government may also offer help to consumers struggling to stay in their homes. The government program, Making Home Affordable, offers borrowers two options: refinancing or loan modification. Refinancing helps borrowers that are current on their loan, but owe more on the mortgage than the house is worth. The loan modification program targets borrowers that are delinquent, in foreclosure, or may default because of a hardship.

To receive relief from either program, the borrower's lender must participate in the program and the borrower must qualify. For more information about Making Home Affordable, visit the program's web site at

Give Your Deed to the Lender

A lender may accept the deed to the home in exchange for the cancellation of the debt. A deed-in-lieu of foreclosure transfers the title to the lender and cancels the mortgage debt. The lender can then sell the house. This won't help you stay in your house, but it can avoid the negative credit consequences of a foreclosure.

File for Bankruptcy

If a lender has already initiated the foreclosure process, a borrower may temporarily delay it by filing for bankruptcy. During bankruptcy, an automatic stay stops all debt collection activities, including foreclosure proceedings. The delay may help the borrower save enough money to become current on the mortgage or will give the borrower more time to negotiate with the lender. Once the bankruptcy court lifts the stay, however - either when the bankruptcy case closes or when the lender receives permission from the court - the lender may proceed with foreclosure proceedings.

Sell the Home

When a borrower is unable to afford the home, the best option may be to sell it. If a home has increased in value since its purchase, the borrower can place the home up for sale and repay the lender with the proceeds from the sale.

If the home is worth less than the amount owed on the mortgage, a borrower may request the lender accept a "short sale." In a short sale, the lender agrees to the sale of the home for less than the mortgage amount.

Still Unsure About Foreclosure?

A house is often a person's single largest investment and a lot of emotion is tied up in your home. Regardless of your individual circumstances you are likely to benefit from professional assistance. If you have additional questions about how to avoid foreclosure, consider speaking with an attorney specializing in foreclosure in your area.

Was this helpful?

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:

Next Steps

Contact a qualified real estate attorney to help you avoid or navigate the foreclosure process.

Begin typing to search, use arrow keys to navigate, use enter to select

Help Me Find a Do-It-Yourself Solution

Copied to clipboard

Find a Lawyer

More Options