Foreclosure Alternatives
OPTIONS TO KEEP YOUR HOME 
Usually available to you after you overcome a hardship that resulted in default on your loan. You might now have the ability to resume making regular monthly mortgage payments, but e unable to come up with the money necessary to cure the total amount past due.
Forbearance: A formal, written agreement between you and your lender to reduce or suspend monthly payments for a pre-determined period of time. This will give you the opportunity to recover from your hardship. At the end of this time period the lender will review options to bring your account current.
Repayment Plan: A formal, written agreement between you and your lender in which you pay your regular monthly mortgage payment in addition to a portion of your arrears for a pre-determined period of time. These plans are designed to bring your account current in a short period of time and avoid foreclosure.
Stipulation Agreement: A formal, written agreement between you and your lender to bring your account current after a foreclosure action has begun. The plan suspends the foreclosure action and you agree to pay your regular monthly mortgage payment in addition to a portion of your arrears for a pre-determined period of time. These plans are designed to bring your account current. The foreclosure action would be cancelled if the plan were successfully completed.
Loan Modification: A program in which a portion of the arrears may be added to your remaining principal balance, to bring the account current. It may also be possible to adjust the term of your loan and/or reduce your interest rate.
Claim Advance (FHA loans or Conventional loans with Private Mortgage Insurance – These plans allow for arrears to be cured by advance made by the insurer of your loan. The funds advanced by the insurer are used to bring your account current and you (as the homeowner) are obligated to repay the funds advanced. You may be required to sign a promissory note to repay the insurer through monthly installments or in one lump sum at a pre-determined time. On FHA loans this option would require an additional lied to be placed on the property.
OPTIONS TO SELL/FORFEIT YOUR HOME
Workout plans that allow you to transfer ownership to the lender or to a third party for less than a full payoff. These options may be considered if you have suffered a hardship, are unable to financially recover, and have insufficient equity to sell your property and pay off the loan in full. The following options are available:
Pre-Foreclosure/Short Sale: If your property value is not sufficient to pay the loan in full, your lender may be able to accept less than the full amount owed. Sale proceeds are accepted as settlement for the debt. You may or may not be required to sign a promissory note for the difference or a portion of the difference.
Deed-in-Lieu of Foreclosure: This options allows you upon approval of the lender to deed your property to your lender, the investor, or insurer as settlement in lieu of foreclosure. Property must be free of all other liens. Homeowners with more than one mortgage on a property do not usually qualify for deed-in-lieu of foreclosure.
