What is Reinstatement?

Bring your mortgage current by paying all past-due amounts, including principal, interest, fees, and costs. Pros: Keeps your home, Restores loan to good standing, Stops the foreclosure process. Best for: Homeowners facing a temporary financial setback who can access funds.

What is Loan Modification?

Work with your lender to permanently change the loan terms—such as interest rate, payment period, or loan type—to make monthly payments more affordable. Pros: Lowers monthly payment, May provide long-term stability, Keeps you in your home. Best for: Homeowners with permanent income reduction but stable employment.

Request a temporary pause or reduction in mortgage payments during a financial hardship, with a plan to catch up later. Pros: Provides immediate payment relief, Gives time to recover financially, Helps preserve homeownership. Best for: Homeowners with short-term income loss (job loss, medical event).

What is a Traditional Sale?

List and sell your home on the open market if you have equity or can cover the sale costs. Pros: Protects your credit rating, Allows you to control the process, Potential to keep some equity. Best for: Homeowners with equity who can afford to wait for a sale.

What is a Short Sale?

Sell your home for less than the remaining mortgage balance—with lender approval—to avoid foreclosure. Pros: Helps you avoid foreclosure, Typically causes less credit damage, May eliminate or settle remaining debt. Best for: Homeowners who owe more than their home is worth and are experiencing financial hardship.

What is Deed in Lieu of Foreclosure?

Voluntarily transfer ownership of your home to the lender to satisfy the mortgage debt. Pros: Avoids the foreclosure process, May qualify for relocation or cash-for-keys assistance, Provides faster resolution than foreclosure. Best for: Homeowners who want to avoid foreclosure but can't sell traditionally.

Foreclosure Alternatives & Options

Options to Keep Your Home

Solutions that may allow you to remain in your current home by addressing missed payments or adjusting your loan terms.

	Reinstatement	Loan Modification	Forbearance
	Bring your mortgage current by paying all past-due amounts, including principal, interest, fees, and costs.	Work with your lender to permanently change the loan terms—such as interest rate, payment period, or loan type—to make monthly payments more affordable.	Request a temporary pause or reduction in mortgage payments during a financial hardship, with a plan to catch up later.
	Pros	Pros	Pros
Pros	Keeps your home Restores loan to good standing Stops the foreclosure process	Lowers monthly payment May provide long-term stability Keeps you in your home	Provides immediate payment relief Gives time to recover financially Helps preserve homeownership
	Considerations	Considerations	Considerations
Considerations	Requires a large lump-sum payment May include late or attorney fees Doesn’t address the cause of missed payments	Not guaranteed approval Could extend the loan term May impact credit during review	Temporary solution only Missed payments must eventually be repaid Interest may continue accruing
	Best for	Best for	Best for
Best for	Homeowners facing a temporary financial setback who can access funds	Homeowners with permanent income reduction but stable employment	Homeowners with short-term income loss (job loss, medical event)

Options to Avoid Foreclosure

Alternatives that help you prevent foreclosure while transitioning from your home in a more controlled, informed way.

	Traditional Sale	Short Sale	Deed in Lieu of Foreclosure
	List and sell your home on the open market if you have equity or can cover the sale costs.	Sell your home for less than the remaining mortgage balance—with lender approval—to avoid foreclosure.	Voluntarily transfer ownership of your home to the lender to satisfy the mortgage debt.
	Pros	Pros	Pros
Pros	Protects your credit rating Allows you to control the process Potential to keep some equity	Helps you avoid foreclosure Typically causes less credit damage May eliminate or settle remaining debt	Avoids the foreclosure process May qualify for relocation or “cash-for-keys” assistance Provides faster resolution than foreclosure
	Considerations	Considerations	Considerations
Considerations	Requires equity or funds for closing costs May take time to sell Market conditions can affect timing and price	Requires lender approval and documentation Can be a complex process May have tax implications	You’ll lose the home May not eliminate all remaining debt May affect credit
	Best for	Best for	Best for
Best for	Homeowners with equity who can afford to wait for a sale	Homeowners who owe more than their home is worth and are experiencing financial hardship	Homeowners who want to avoid foreclosure but can’t sell traditionally

Short Sale FAQs

Do I pay realtor commissions in a short sale?

No. Commissions are paid by the lender from the sale proceeds as part of the approved settlement costs.

What if I'm being relocated for work?

Job relocation is a recognized hardship. Document the relocation requirement, distance, inability to rent/sell traditionally, and submit these with your short sale package.

What happens on closing day of a short sale?

Similar to traditional sales: documents are signed, funds are disbursed, title transfers to the buyer, and you receive your lender's approval letter confirming debt resolution.

Can I short sale a condo or townhouse?

Yes. Condos and townhouses can be short sold, though HOA liens and approval requirements may add complexity to the process.

What causes delays in short sales?

Incomplete documentation, multiple lienholders, lender backlog, low offers requiring negotiation, title issues, and investor approval requirements often cause delays.

Do I need an attorney for a short sale?

Not always required, but recommended if you face deficiency judgments, tax implications, multiple liens, or complex legal issues like divorce or bankruptcy.

See all FAQs

Your Options

Options to Keep Your Home

Options to Avoid Foreclosure

Short Sale FAQs

Need Help Choosing the Right Option?