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If you’re facing foreclosure and would like to avoid that as your final outcome, there are numerous strategies and options which may delay or prevent your home being sold at auction. In order to determine what the best option is for you given your specific circumstances, it is best to talk with an Attorney or a qualified housing counselor. The Washington State Department of Finace has a homeownership hotline: 1-877-894-HOME.

As a general rule, here are some options for homeowners facing foreclosure:

Reinstatement:

If your reason for falling behind in temporary and you’ve since recovered financially, you have the right to pay up all your past due payments and fees and continue with your mortgage under it’s original terms.

Forebearance:

This is along the lines of a “repayment plan” for the owner. Perhaps you missed a few payments due to an illness or temporary condition, you may be able to negotiate with your lender to pay the missed amount over a period of time. You will usually be required to show documentation of the hardship causing the missed payments.

Renting the property:

Not everyone facing foreclosure is upside down in value. In fact, several owners in my market area have allowed their homes to go to auction when there was plenty of equity in the home. When lending restrictions are tight, the rental market strengthens. This is usually a short-term solution, but in our area, we don’t know when prices will begin to recover and increase, so it may be a viable option for some owners.

Deed in Lieu of Foreclosure:

This is also known as a “friendly foreclosure” and will only work if the owner has one mortgage on the property. Essentially the owner gives the deed back to the Lender to avoid the Trustee sale.  If an owner has equity this isn’t a good option since they will forfeit any amount when going this route.