selling a house in foreclosure court house gavel

Can I Still Sell My House in Foreclosure?

Home » Foreclosure


If your house is in foreclosure, you likely fell behind in paying the mortgage, and you may also be incurring the lender’s attorney fees for your delinquency. Different people have different feelings and reactions when in this situation. From feeling sad, ashamed, disappointed, in panic, or even paralyzed or in denial, and having the instinct to ignore the problem, as if it could just go away…but it won’t, and when in pre-foreclosure, time is of essence. But wait! All is not lost. Foreclosure doesn’t happen overnight. It’s a long process, for you and the lender. The worst thing you can do is do nothing.

Do not wait until your foreclosure is 30 days away, when the lender takes possession of the house with the intent to auction it.

Are you in Pre-Foreclosure or in Foreclosure?

Although the term “foreclosure” is often used to describe both circumstances, there is actually a significant difference that comes down to ownership. 

Pre-foreclosure is part of the process to foreclosure. Most times, it starts 3 to 6 months after your first missed payment.

At that 3-month mark, you’ll likely receive a Demand or Notice to Accelerate letter from your lender to pay up in 30 days, or they’ll foreclose on your house. From the date of notice, it may be 2 to 3 months till the scheduled sale of your house at auction. 

Foreclosure is at the end. Your house is no longer yours. The bank repossesses it or sells it at auction. The foreclosure is also marked in your credit history for a period of seven years, making it extremely hard for you to be approved for a new house mortgage.

Pandemic Exceptional Circumstances

Due to the coronavirus pandemic, the government has offered mortgage relief options and the type of mortgage you have may have different requirements. Many mortgage lender servicers couldn’t even start the foreclosure process before January 1, 2022 and without contacting you to review your options.

Can I Sell My House in Pre-Foreclosure?

If you’re behind in payments because you fell on hard times, you can try to strike a Forbearance Agreement with the lender, but this does not void what you owe. Payment is only postponed. It is also less likely to be approved, if you’re already in pre-foreclosure, to request forbearance.

If you get approved for forbearance, this will give you more time to sell your house or, if you change your mind, to try to make up for missed payments.

The time you have is important because, even in a hot market, depending on the condition of the house and its location, it may be hard to sell within a short timeframe, using the traditional method of listing it with an agent.

Selling your house during pre-foreclosure is one way to prevent foreclosure, and if it’s done early enough, you may be able to get the market value for your property. If you want to list it, it’s important to find a top agent who can help you sell it with the intention of paying off the mortgage and potential lender attorney fees.

In the potential of a short sale, you need to notify your lender, as it requires their authorization. 

Can I Sell a House in Foreclosure?

When the house is foreclosed, meaning the bank takes ownership, the bank will usually send an agent to help you relocate. Most people think a sheriff will come and kick them out, but that only happens if you fight the bank.

Once the bank forecloses the house, it starts the courthouse steps to have it sold at auction. It is not immediate. Until the day of the auction, you can still attempt to sell. Most banks and servicers would rather avoid the auction, if it can be sold prior, and may even be willing to extend terms and negotiate to have it done.

Step 1: Calculate What You Owe

If you’re behind in mortgage payments, there are likely late fees attached. Also, you may have accrued fees owed to the mortgage company’s attorney which are associated with your delinquency.

Add up the sums of what you owe, plus any interest, and subtract it from your estimated sale price.

Step 2: Subtract Selling Fees Too

That’s right: it costs money to sell a house. Selling fees include staging and cleaning costs, as well as the realtor commission, closing fees, seller concessions, and moving costs. Deduct these from the sale price.

Why all the deductions? Because you want to find out if selling your house will cover what you owe your lender, as well as closing costs and selling expenses. With any luck, you’ll have some money left over. If, however, you’re in the black, then perhaps you should negotiate with your lender to do a short sale.

Step 3: Hire a Realtor or Sell FSBO

If the foreclosed house goes to auction, you may still end up with debt due to legal fees. Plus, you will pay taxes for the “forgiveness” of the mortgage. The best situation is to get it sold and hopefully, get some of the excess funds.

Your timeframe to sell is short. Your options include:

  • If the house is in a hot market, a good location, and in great shape, it may sell fast with an experienced Realtor, who knows how to navigate the extra paperwork and evaluate potential buyers.
  • Otherwise, your best option is to sell it yourself to an investor. Investors with experience in purchasing foreclosed properties know how to speak with banks and have their own lawyers ensure a successful transaction.

Step 4: Whatever Path You Decide – Keep the Lender in the Loop!

Keep your lender informed of progress throughout the house selling process. Communicating with the lender is vital. Many will work with you to get it sold rather than foreclose.

SolidOffers Can Help You Sell Your Foreclosed House

When time is of the essence, your best option is to sell your house in foreclosure to a real estate investor. SolidOffers screens hundreds of real estate investors, confirming their reputation, and connects you with legit investors in your market who can help you. Not all investors are the same. When the house is already foreclosed and set to be in auction, you need an experienced investor who will essentially do all the heavy lifting, using their resources to work it out with the bank.

If you are in pre-foreclosure, or your house is already foreclosed, contact us ASAP, so we can ease the process of selling your house in foreclosure.

How to Sell a House if You’re Behind on Mortgage Payments

How to Sell a House if You’re Behind on Mortgage Payments

Home » Foreclosure


Anyone can fall behind in their mortgage payments. Illness, divorce, job loss – whatever the reason, you quickly find yourself falling behind on bills, and debt grows. If you fall behind in paying your mortgage and fail to take action, you risk foreclosure.

Foreclosure has its consequences, including a deficiency balance, tax implications, difficulty buying another house (or renting), and a big hit to your credit score. Depending on where you live, you may have 120 days before your property is foreclosed.

Often the best way to avoid foreclosure and save yourself a lot of time and stress is to sell your property and pay back what you owe the lender. But selling your house fast takes work and finding a willing buyer.

How to Sell Your House if You’re Behind on Mortgage Payments?

To avoid losing your house, you can try consolidating or refinancing your loan or entering a forbearance agreement with the lender, but a lot of homeowners sell when they see no way to pay what they owe fast enough.

Step 1: Talk with Your Lender

Your lender needs to be informed of your decision to sell and why. They may be able to help you by giving you an extension, giving you more time to find a buyer. However, whether you can sell or not will depend on how much the house is worth versus how much you owe.

If you are not underwater yet, and your property is worth more than what you owe, you can sell and pay back the lender. Easy and straightforward.

BUT, if your house is worth less than the outstanding mortgage payment, you’ll need to do a short sale. The catch is your bank has to agree with the terms of the sale.

Step 2: Do Your Research

To find a buyer fast, you need to know your market. Gather all the information you need to know how to get their attention and negotiate a quick deal.

Step 3: Find a Realtor You Can Trust

Unless you are confident you can sell FSBO in a number of days, you’re going to need help. Find yourself a good real estate agent you can trust to help you navigate the market and negotiate a good deal.

Step 4: Make the Property (and Sale) More Appealing

As you may know, traditional buyers tend to request repairs or a reduction in your asking price. Chances are, if you are behind in payments, you cannot spare the money (or time) for repairs. So what are your options?

You can give the house a facelift: painting, cleaning, and improving curb appeal are a few things you can do. BUT you can always offer financial incentives to inspire confidence in buyers and satisfaction with the sale.

Step 5: Sign Paperwork, Close, and Pay What You Owe

Speaking through your agent, negotiate the terms of sale quickly, sign the necessary paperwork, and get it expedited.

You should keep your lender informed throughout the sale and notify them of closing day. Once you have the proceeds from sale, pay off what you owe the lender fast, so you can walk away without further complications.

What If I Can’t Sell My House?

If you’re worried you cannot sell, and time is running out, the best thing you can do is sell to a real estate investor. Why? Because investors pay cash for properties “as-is.” No repairs, no cleanings, no traditional sale warranties or inspections, and no lengthy mortgage approvals. It’s a fast, easy transaction.

You enjoy a quick closing, on a day of your choosing, and can pay back the lender what you owe in cash. This way, you avoid the repercussions of foreclosure, giving you a better chance of buying another property and saving your credit score.

What are the Consequences of Foreclosure

What are the Consequences of Foreclosure?

Home » Foreclosure


Foreclosure happens when you fail to make mortgage payments, and you default on the loan, or you violate the terms of the agreement and lose ownership of your house. It’s important that you know what happens if you do nothing and foreclosure becomes unavoidable.

Contrary to what most homeowners think, walking away is never the best option, even if your property is valued lower than what you owe. The consequences of foreclosure are devastating and long lasting.

Consequences of Foreclosure

Foreclosure is a time-consuming and stressful, and sometimes even expensive, process. If you fear it is impending, talk with your lender about other options, like a temporary forbearance agreement.

The truth is, the bank does not want to foreclose on your property because it’s a long, difficult process for them too, and costs them money. But between the parties, you’ll take the biggest hit.

1. Damage to Your Credit Score

If you do nothing to stop foreclosure, your credit score will drastically drop. Good credit scores drop by 100 points or more, while excellent scores reduce by as much as 160 points. So the higher your score, the more impact foreclosure will have on it.

It can take three to seven years of on-time payments to fully recover your score.

A bad credit score leads to expensive interest rates and limited credit, making your financial recovery difficult.

2. May Owe a Deficiency Balance

If you fail to pay off what you owe during the foreclosure period, the property goes to auction. It’s rare that a property sells for more than the amount owed, but if it does, there’s no deficiency. If it sells for less, you’re responsible to pay the remaining debt.

Deficiency Judgements vary by state law.

3. Tax Implications

Any time a debt is forgiven, the IRS considers it income and taxable. If the debt (aka what you owe on your loan) is canceled or forgiven, it is reported to the IRS on a Form 1099-C, Cancellation of Debt. The amount must be reported with your income taxes.

4. Forfeit getting a Fannie Mae mortgage for at least 7 years

Fannie Mae and Freddie Mac Agency Mortgage Guidelines demand a waiting period of 5 to 7 years (from the date of foreclosure) before you can qualify for a conventional loan. As a result, it will be difficult for you to borrow money to purchase another house.

Extenuating circumstances, like job loss, illness, or divorce, may alter the waiting period.

5. Eviction

Once the bank seizes the property, it’s no longer yours. You’ll be evicted and lose any equity you may have established.

6. Problems Finding a New Home or Renting

You’ll have to find a new place to live after you’re evicted. Since there’ll be a waiting period before you can get another loan, renting may be your only option.

Landlords look at your credit score to determine your level of responsibility. A foreclosure in your credit report and a consequent low score will make landlords wary. And even if a landlord is willing to accommodate you, it may be in the form of an inflated security deposit.

Facing Foreclosure? Sell Fast to Avoid the Consequences

If you cannot pay what you owe, rather than go through with foreclosure, you can short sale to a real estate investor. Most investors make a cash offer on a property “as-is” – that means no repairs, renovations, or cleaning. They forgo lengthy mortgage approvals, traditional sale warranties, appraisals, and inspections, and can often close in 30 days or less.

You and your lender can negotiate the short sale terms, sell fast, and you can walk away without a hit to your credit score or owing the bank more money.

handshake house sale Pros and Cons of a Short Sale

Pros and Cons of a Short Sale

Home » Foreclosure


When a homeowner is financially distressed and cannot pay their mortgage, their best option is to sell. A traditional listing takes too long. Even if a buyer showed immediate interest, they (and their lender) will request repairs. There is no time to restore the house, no time for negotiations. You need to sell fast and pay off the lender.

Home sellers in these situations often turn to a short sale. It is a better option than facing foreclosure. Let’s compare and discuss the advantages and disadvantages of a short sale.

Why You Should Avoid Foreclosure?

Foreclosure is when the lender takes possession of the mortgaged property because the borrower defaulted on mortgage payments. The lender will then try to sell the house to cover their losses.

The consequences of a voluntary foreclosure include:

  • Credit Impact: your credit score plummets as much as 160 points, and “foreclosure” stays on your credit report for up to seven years.

 

  • Housing Issues: it will be several years before you can buy another house, because a foreclosure discredits you with lenders.

 

  • Deficiency Judgement: there is a chance that if the lender sells the house for less than what you owe, you will be ordered to pay the difference.

 

  • Debt Relief Taxes: even if the deficiency is forgiven, the IRS views the canceled debt as taxable income.

What is a Short Sale?

A short sale is when a property owner at risk of default sells their property for less than the amount owed on the mortgage. The lender must approve the sale after being given collective documentation by the seller as to why it’s a good idea.

A short sale is actually a chance for a lender to get more money than if the property were to go to foreclosure auction. Once they receive your package, the short sale process takes more than 30 days to complete. If approved, and a buyer makes a good offer, the lender will issue a short sale approval letter.

Pros of a Short Sale

The advantages of a short sale include:

  • Avoiding foreclosure and being released from your mortgage obligation.

 

  • Recovering your credit score sooner.

 

  • Getting financial approval for another house more quickly.

 

  • The lender might pay the closing costs.

Cons of a Short Sale

The disadvantages of a short sale include:

  • More parties are involved in negotiations: the lender has a higher stake and must approve a buyer’s offer.

 

  • If there is more than one mortgage or lien against the property, all lienholders are involved in negotiations.

 

  • A buyer’s pre-approval for financing could expire before the lender approves their offer.

 

  • If the property is in bad condition, the buyer’s lender may not approve a loan to purchase.

 

  • A deficiency judgement could still be issued if the lender does not forgive the difference between the sale price and outstanding mortgage balance.

 

  • Your credit score will still take a hit, also as much as 160 points, and a short sale will stay on your credit report for up to seven years.

Short Sale versus Foreclosure: Credit Score

I have said here that both foreclosure and a short sale will hurt your credit score. So which is the lesser evil? The difference is:

  • With foreclosure, the entire unpaid loan amount, as of the date of foreclosure, is shown on your report.

 

  • With a short sale, the reported balance is the outstanding loan balance minus the sale amount received.

If the difference between these balances is significant, the negative impact will be less severe with a short sale.

Sell for Cash to an Investor Buyer

You can speed up a short sale by selling to a real estate investor. Investors pay cash for a property “as-is,” be it damaged, neglected, or vacant. They do not require traditional sale warranties, an appraisal or inspection. Forgoing these steps will save you time and headaches.

The investor pays 100% of closing costs and associated sale fees, saving you and the lender money. Furthermore, you and the lender choose the closing date, which can be in 15 days or less. You can offload the source of your financial distress, satisfy your debt, and start over with a new home.

Solid Offers how to sell house in Forbearance

4 Ways to Sell Your House in Forbearance

Home » Foreclosure


To delay a foreclose on the mortgage, lenders and borrowers can forge a mortgage forbearance agreement. If you try to sell your house while in forbearance, the lender might extend the forbearance agreement. Foreclosures are expensive and can drag out for months. Lenders want their money back fast, and they have neither the time nor the resources for dealing in home sales.

Keep in mind: the forborne amount of your mortgage must be paid back in full upon sale of the home. This comes out of the purchase price of the house.

1. Traditional Listing

A listing agent lists the home on the Multiple Listing Service (MLS) and a brokerage site (if associated with a brokerage) and produces yard signs. They pinpoint the selling price, stage and market the home, show it to prospective buyers, and negotiate offers. It takes at least 70 days to make a sale, and the agent is compensated for their efforts. Compensation is either a small flat fee at the beginning or commission upon sale.

2. Realtor

A realtor is different from a listing agent in that a realtor is a member of the NAR. Realtors have more resources than agents to sell a house, but their responsibilities are similar. They help decide the asking price, advertise and show the home, and evaluate offers. Upon the sale of the home, they receive a percentage of the sale price as a commission.

Selling with a realtor takes 70 days or more, and this can be attributed to buyer actions. In the purchase process, buyers have more steps than sellers. These steps include the home inspection, appraisal, and mortgage approval. If a step is delayed or fails, it takes more time to sell the house.

3. Sell It Yourself

Selling a house by yourself is a huge undertaking. You are responsible for the following:

  • Determine the market value of your home.
  • List the home online.
  • Market the home.
  • Clean and stage the home.
  • Coordinate walkthroughs.
  • Negotiate terms of sale.
  • Handle the closing.

Without professional help, it can take two to six months to sell the house by yourself. It is also a costly venture, and if you are in forbearance, you may not have the funds to sell a house.

4. Instead, Sell to a Real Estate Investor

If you want to make a quick and easy sale without having to market, show, or stage the home, consider selling to an investor. Most investors will make a cash offer on the house regardless of its condition or while it is in forbearance. You can close fast, pay off your loan, and be free of debt.

For information under the CARES Act, Mortgage Forbearance, see What You Need to Know by consumerfinance.gov.

solid offers Worried man who needs to sell house while in forbearance

Can I Sell My House while in Forbearance?

Home » Foreclosure


When a mortgage borrower is unable to pay off their loan, a lender will opt to foreclose. This means they seize the property and sell it to recover their lost money. To avoid foreclosure, lenders and borrowers will forge a forbearance plan.

Added October 19, 2021: The Bureau of Consumer Financial Protection proposed amendments that establish a temporary COVID-19 emergency pre-foreclosure review period until December 31, 2021, for principal residences. This does not extend to secondary residences, vacation properties, or rentals.

The final rule establishes temporary procedural safeguards to ensure borrowers have an opportunity to be reviewed for loss mitigation before their forbearance period ends and before the mortgage lender can make the first notice or filing required for foreclosure. Moreover, the proposed amendments temporarily permit lenders to offer loan modifications to borrowers experiencing a COVID-19-related hardship post evaluation.

The CFPB’s final rule took effect August 31, 2021. These rulings apply to federally-backed loans. All other loan types are at risk of foreclosure without review. Check with your lender for options and proceedings. Sources include the CFPB and Federal Register (National Archives).

What is Forbearance?

Forbearance means the parties agree to new mortgage terms. The borrower will pay interest-only payments or smaller payments for a few months or a temporary pause on paying back the loan. These postponed payments will eventually be due. This debt is not forgiven.

Forbearance is good for anyone who has suffered a hardship. If a home is damaged in a flood, or the economy takes a hit, and you lose your job, forbearance eases mortgage stress. It is a complicated agreement because there is no “one size fits all” arrangement. Options will vary based on the lender, type of loan, and owner requirements in the mortgage loan.

Forbearance under the CARES Act

Protections under the CARES Act apply to all federally backed and federally sponsored mortgages (Updated: April 2021 to reflect new information).

  1. For mortgages backed by the FHA, USDA or, VA, the deadline to request an initial forbearance is June 30, 2021.
  2. For loans backed by Fannie Mae, Freddie Mac, FHA, USDA, or VA, your lender or loan servicer cannot foreclose on you until after June 30, 2021.
  3. If your financial hardship is due to the COVID-19 pandemic, you have a right to request and obtain a forbearance for up to 180 days (for a total of up to 360 days).
  4. When the forbearance period ends, you are not required to repay the skipped payments in a lump sum. You can discuss a repayment plan.

Can I sell my house while in forbearance?

The answer is yes; you can sell your house while in forbearance. However, the forborne amount must be paid back upon sale of the home. This amount will likely come out of the purchase price of the home. You must also pay off the owed balance remaining on the mortgage; this too comes out of your profit.

If you plan to sell while in forbearance, your lender might extend the forbearance agreement. Foreclosures are hugely expensive and can drag out for months. Lenders want their money back fast, and dealing in home sales can exhaust their time and resources. If you sell, a lender can receive full payment of the loan and be spared the home sale process.

Things to Consider

A forbearance is, again, a temporary loan modification. Note the word “temporary.” Even if you get the lender to give you an extension, you have to consider the selling process.

You enter forbearance because you cannot afford to make regular monthly mortgage payments. Now consider:

  • If a home needs repairs or renovations, can you afford these?
  • Can you afford professional cleaning and staging services to maintain walkthroughs?
  • If you hire a realtor, they get a commission fee from the purchase price of the home. Selling a home costs money, and if you already have trouble making mortgage payments, can you really afford to sell through a traditional listing?
  • In sum, can you afford to sell to another hopeful homeowner?

Instead, Sell to an Investor

If you want to sell fast and make a profit, consider selling your house to an investor. Most investors will make a cash offer on a home regardless of its condition or while it is in forbearance. You can enjoy a quick closing, pay off your loan and delayed payments, and be free of the menacing debt.

solid offers How to sell house in pre-foreclosure or foreclosure

How to Avoid Foreclosure and a House Auction

Home » Foreclosure


Life is full of ups and downs. Sometimes the job market is great, and other times we are left scrambling to make ends meet. For many homeowners, a downturn can mean coming face to face with pre-foreclosure and even foreclosure.

The good news for the distressed homeowner is that there are options. Before we can discuss which options are viable for you, you will first need to determine precisely how much you owe on the property and if any assistance is available from either the government or the mortgage provider.

Contact Your Lender

The best time to call your lender is before you start missing payments. This puts you in a much better position, and the mortgage provider may be able to offer you payment deferral or other assistance. At the very least, you will be able to establish precisely how much you owe and when you have to pay it. Collecting the facts is the first step towards resolution. 

Are you already in Pre-Foreclosure?

The term pre-foreclosure frightens many folks, but it does not mean your home is being taken away or sold out from under you. At least not yet. Pre-foreclosure means that you are behind on your mortgage payments and have received, or should have received, a Notice of Default for lack of payment. During pre-foreclosure, the lender will initiate the legal proceedings to repossess the property eventually. As long as you can pay what is owed during the pre-foreclosure period, then all legal proceedings cease, and you never have to face foreclosure. 

Even if you are unable to afford the back payments, there are many ways to avoid foreclosure. And, believe me, you want to avert foreclosure if at all possible. I’ll explain why before we delve into the various options available to you.

What a Foreclosure means for the Homeowner

Without taking evasive action, a house in pre-foreclosure will inevitably end in foreclosure. Here is what that means.

  • A court ruling gives the lender full ownership of the property.
  • The occupants of the property will be forcibly evicted from the premises.
  • The lender will sell the property, generally at auction, and keep all proceeds of the sale.

Unfortunately, the consequences do not end there.

  • The foreclosure will go on your permanent record.
  • You will be unable to qualify for a loan even years after.
  • Your credit score will plummet.
  • You will be ineligible for relocation assistance.
  • The foreclosure will turn up on rental and employment background checks.

For these reasons, not to mention the stress and psychological trauma, foreclosure and the house sale at auction are a very last resort. Thankfully, there are ways to avoid it.

Option A: Find the Funds and Make the Payments

This is, by far, the best outcome. It certainly won’t be easy, but there are ways to raise the money necessary to stave off foreclosure. Doing so will enable you to retain ownership and residency of your property while protecting your credit and generating equity.

Here are a few methods to consider (the more you can apply, the better):

  • Delve into your budget and cut out any non-essentials. 
  • Consider getting a second job or renting out any unused bedrooms for supplementary income.
  • Investigate a loan modification to lower your monthly payments.
  • Some lenders will offer forbearance, meaning you won’t have to make mortgage payments (or at least not all of it) for an agreed-upon time. This can provide the time needed to get back on your feet and save up money to make the back payments.

These options are great for those going through a temporary rough patch and need some time to catch back up. If, however, you see no chance of alleviating your financial difficulty in the near future, other options may serve you better.

Option B: Equity in Your House? Sell Quickly

Why quickly? Because, depending on what stage of the foreclosure process you are in, you may not have much time before the lender takes ownership of the property, and you are left with nothing. 

This option works best if you have equity in your house, meaning your mortgage is less than the property is worth. Selling your house under these circumstances will enable you to pay off the mortgage (thereby avoiding foreclosure), save your credit score, keep a foreclosure off your record, and let you keep any money left over from the sale to start fresh.  

Here are your two best options to sell and walk away with cash in your pocket:

  1. Hire a Real Estate Agent. Although you may net a little more this way, a traditional sale typically takes months. This time factor makes it risky since that is time you may not have. Not to mention the house’s risk falling out of escrow, the expenses involved while the house is on the market (taxes, insurance, utilities, etc.), or the money that is so often needed for required repairs during a traditional sale, money you may not have.
  2. Sell quickly to an investor for cash. By using a trusted network of investors, such as offered by SolidOffers.com, you can have a cash offer on your house within 24 hours. A cash buy also means a fast close (usually within 7-14 days, so the bank won’t have a chance to foreclose). You won’t have to pay any real estate commissions, you can pick your moving day, and a cash buyer will often cover all the closing costs. You may not net as much this way, but you will be able to walk away with money in your pocket (instead of in the lender’s) while avoiding the long-term consequence of a foreclosure. 

If you are pressed for time, selling your house quickly to a cash buyer is often your best route in avoiding foreclosure. Not everyone has equity in their property, though. So, what to do if you owe more on the mortgage than your house is currently worth?

Option C: Money out of Pocket

Of course, you could sell your house for less than the mortgage amount and then make up the difference yourself. This, of course, only works if you have the funds to do so. Even then, it is a reluctant option. Nobody wants to pay the bank out of pocket and receiving nothing from the sale of their house, but the consequences are far less severe than a foreclosure. For some, it may be their only option.

Option D: Short Sale

If you are upside down on your mortgage, you may want to consider a short sale. A short sale allows you to sell your house for less than you owe on it and, usually, walk away without debt. But there’s a catch. 

Since your lender will receive less than the mortgage balance, they first have to agree to a short sale. Not all lenders will, and those that do will have the final say on any offers. Your credit score may still dip, but not nearly as much as with a foreclosure. There are some other drawbacks too.

Since the lender is involved in the selling process, the escrow period can take months or years once a buyer is found. And there are no guarantees with a short sale. If the best offer is well below the mortgage balance, the lender may refuse the sale or try to hold you responsible for the difference (depending on the laws in your area).

A foreclosure is never easy, but fast action can save you time, money, and grief. Your best option is to make up your payments.

Your second-best option, if you have equity in your property, is a quick cash sale. Doing so will avert foreclosure while putting the remaining proceeds in your pocket instead of the lenders. And that, we can all agree, is where your money belongs.