How To Avoid Foreclosure

If you feel you can’t meet your home loan obligation or you are anticipating a major financial issue in your life, you may want to be proactive so your home is not lost to foreclosure. You can avoid foreclosure if you move quickly, as soon as you begin to get behind on your loan payments.

Contact Your Lender

If you begin to realize you will have a problem paying your loan on time contact your lender. This is something most folks in trouble never do. It’s a big mistake. Your lender does not want a defaulted loan any more than you do. They are probably anxious to try and work something out. But you must be honest about your situation. There’s no point in painting a picture that’s rosier than it actually is. Tell them exactly what you can do and what you can afford. Don’t mislead them or yourself.

Know The Law

Remember you have rights. Foreclosure laws are there for your protection. The more you understand your rights and responsibilities the better chance you have of doing the right thing. Get a hold of a copy of Chapter 702 of Florida Law. If you have trouble finding it let us know. We can help. Foreclosure proceeding in Florida must follow a very specific process. Make yourself knowledgeable of that process.

Of course this is where a good attorney can really help. It’s their job to know the laws and all of your options.

Know The Language

There are many relevant terms you should understand. These terms relate to the different stages and strategies that a foreclosure process goes through. Your lender will know them and will use them for their advantage. Don’t be at a disadvantage by not knowing your options.

Here’s a few to consider…


If you can come up with the money that you owe, or prove that it will be coming soon, you may get the lender to grant you a reinstatement. If you have a tax refund, or bonus, or inheritance coming, and can prove it, then more than likely your lender will work with you. Again, be sure what you say is true and will happen. Over confidence will only count against you if things go bad.


If you can work out a payment plan or somehow convince your lender, you may get them to temporarily provide a reduction in your loan payment amount, or maybe even have them suspended for a period of time. Again, be realistic. You will have to be able to do what you say you will. Otherwise you’ll just be back where you started… with one more strike against you.

Loan Modification

This is much like it sounds… you get the lender to change the terms of the loan. This can be a permanent change or perhaps a temporary change. An adjustable interest rate that starts low and goes up over time, is the type of arrangement that is often suggested. Of course any amounts that you haven’t paid will be added to the loan amount in some fashion.

What If You Decide You Can’t Pay But Want To Avoid Foreclosure

Of course if you really decide that you can’t afford to stay in your home you have some options too.

Short Payoff

In this arrangement, you sell your home for less than you owe and your lender agrees to write off the part of your mortgage that is not covered by the sale. This is a last resort from a lender’s point of view, and not that common.

Short Sale

If the lender agrees you can sell your home for less than you owe. This is known as a short sale. Learn more about a short sale here. In a short sale it’s always a good idea to have legal help to make sure your short sale agreement is in your favor and not in your lender’s.

Deed-in-lieu of Foreclosure

This is where you basically sign over your home to the lender. They get the title and own the property at that point. Typically they will ask you to try and sell the home for fair-market value first for at least 90 days. There must be some effort to get the full amount on your part.


In an assumption, a buyer who qualifies through the lender takes over payments on your home. This is one way to sell your home with minimum credit problems and to avoid foreclosure.


This is where you get an entirely new loan agreement. This often does not work in your favor because the new interest rate may be excessive. Some lenders do this in a predatory way so be careful if someone approaches you with this option. Again know your rights.

Filing Bankruptcy

Filing Bankrutcy is an option to be considered. But don’t take the decision lightly. It will significantly affect your credit for at least 10 years.

These are some of your options when you can’t pay your mortgage and you want to avoid foreclosure. Having a foreclosure specialist like an attorney by your side can help you negotiate what could be a minefield if you don’t know what your are doing.