Keeping Your Home When All Seems Lost

Statistics show that foreclosures are at the lowest levels since early 2008, the beginning of the housing crisis. This good piece of news may not mean much to you if you are on the brink of losing your home. 

In as much as foreclosure activity has decreased to the lowest levels in over a decade, a reported 35,787 homeowners lost their homes to foreclosure in the first quarter of 2019. At that rate, we can project that over 140,000 homes will be repossessed by the end of the year. Many of these homeowners have had loan modifications in the past. Loan modifications are not a permanent solution to all problems, and redefaults are not uncommon.

If you find yourself in the unenviable position of being one of those homeowners facing foreclosure, what can you do to keep your home when all seems lost? If you are facing the possible loss of your home, there may still be hope for you. Let’s review a few things you should NOT do and some things you can do to keep your home.

What Not To Do If You Are Facing Foreclosure

From extensive experience in loss mitigation departments handling hundreds of thousands of loans in foreclosure, I am going to share some of the biggest mistakes people make when facing foreclosure.

Ignoring The Urgency Of The Situation. Time and again homeowners in trouble will stop even opening the different notices that are sent by their lender regarding the status of their mortgage. It is an emotionally difficult time and it is just normal behavior to not want to deal with the negative news. Unfortunately, when you are dealing with mortgage defaults, time can be your worst enemy. Every step of the process to repossess your home has a time frame attached to it. Banks adhere to those timelines in order to protect their interest. As a homeowner, you need to be aware of those timelines so that you can protect your interest as well.

Foreclosure Timeline (Source: HUD)

Falling For Foreclosure Rescue Scams. Those who are desperate for a solution often fall prey to unscrupulous individuals just wanting to take advantage of the situation. When your lender files a “Foreclosure Notice”, or even a “Notice Of Default”, it becomes public record. Predators looking to make a quick buck mine this data and may contact you to offer a variety of “Solutions” to save your home. Beware of anything that sounds “too good to be true”. 

Examples of popular scams are:

  • Foreclosure Rescue Operations. These are people who may come to your home unannounced to offer to help you get out of foreclosure for an upfront fee. They are typically unlicensed people operating outside the law. It is illegal for anyone to charge you for any type of foreclosure rescue service until it is fully rendered and your home is out of foreclosure.
  • Someone offering to bring your loan current if you deed the property over to them. They may promise to work directly with your bank and claim that they need to be on title first in order to negotiate with the bank. There may even be the promise of a future pay-off to you once they fix things and sell the house to another 3rd party. These con-artists usually will just take title to your house, rent it out for as long as they can and collect rents while they do nothing to bring the mortgage current.

What You Can Do To Save Your Home

Even when it all seems lost, there may be alternatives you may have not explored to keep your home from foreclosure. Even if in the end you may need to sell it, at least you can avoid foreclosure. There are also choices you may not have been made aware of or considered until now.

Seek Legal Advice.  First and foremost, consult a qualified Real Estate Attorney who specializes in foreclosure. They can assess your situation and at least explain to you the different events that lead up to foreclosure. Ignoring these can cause you to lose your home when you may have had a chance to do something about it.

In practically every region of the country, there are attorneys willing to give you a short consultation at no charge to see if they can help you. If you lack the money to arm yourself with legal counsel, there are usually legal aid clinics who may be able to give you a more thorough evaluation as well as legal advice at no charge.

Get In Touch With HUD Homeowner Counseling Agencies. If you have tried to keep your home using the loss mitigation tools and services that your lender offers, and are still having trouble with your mortgage, you may need to seek assistance outside of your lender. The Department of Housing and Urban Development (HUD) has many resources along with branches at the Federal and State level to preserve homeownership. You can contact HUD approved housing counseling agencies at the state level to help you through your foreclosure prevention efforts.

If The House Must Go

Sometimes, we have tried everything and there just is no choice but to let go. If you have looked at every possible alternative and you need to just accept that you can not keep the home at this time, you can still try to make the best of the situation. Here are some steps you can take:

Consult A Real Estate Agent. If you have owned your house for a few years, there may be some equity left in it. Unfortunately, people lose their homes every day and they do not realize they could have at least walked away with some money. Even if you think you have nothing left, at least get a professional opinion.

Consider A Deed In Lieu Of Foreclosure. As a last resort, talk to your lender about deeding the property back to them so they don’t have to foreclose. Keep in mind that the last thing they want to do is to own a house. But foreclosure costs are expensive, and it may be worthwhile for them in many cases to voluntarily have the homeowner give up the home. They may even give you what they call “Cash For Keys” which is basically an incentive for you to leave the home in a habitable condition and completely remove your belongings so they don’t have to.


Homeownership is the American Dream. Occasionally due to life circumstances, it doesn’t end the way we had envisioned. You can still try to make the best of it to the very end. Remember that the loss of a house is not necessarily the end of the world. If you can preserve your credit as much as possible, there is always another opportunity to re-enter the market at a later time when your financial circumstance may be better for you.

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