A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests to know the total amount owed to the mortgage company to date, and then pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

A homeowner with a mortgage payment low enough that market rent will allow it to be paid can convert the property to a rental and use the rental income to pay the mortgage.

If a homeowner has sufficient equity in the property, they can list the property with a qualified agent that understands the foreclosure process in their area and sell their property.

If a homeowner has sufficient equity in the property and his/her credit is still in good standing, a mortgage refinance may be an option.

A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any or all of the above. This typically results in a lower payment for the homeowner and a more affordable mortgage. Currently, only a low percentage of loans are modified long term.

Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. A deed in lieu requires lender approval and requires the homeowner to vacate the property.

Bankruptcy has been marketed by many as a ‘foreclosure solution’, which it can be in some states and specific situations. If the homeowner has non-mortgage debts with payments causing a hardship—to the homeowner falling short of paying the mortgage payments, and personal bankruptcy will eliminate these debts – this may be a viable solution.

If a member of the military is experiencing financial distress due to deployment and that person can show that their debt was entered into prior to deployment they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with Servicemembers in relation to qualifying for this relief.

A short refinance is a tool that is sometimes employed to prevent foreclosure. Generally, the original lender extends the short refinance in an effort to minimize the amount of loss that would occur on the transaction if the foreclosure took place.

If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell the property through the negotiation of a short sale with their lender. This typically requires the property to be listed on the market, and the homeowner must have a financial hardship to qualify.