Foreclosure Alternatives: Short Sale and More

Foreclosure has serious, long-lasting consequences — significant credit damage, potential deficiency judgments in some states, and loss of home equity. Most alternatives preserve more of your financial standing if pursued early enough.

Permanently restructures your mortgage terms to make payments affordable going forward — see our dedicated guide for how this works.

A temporary pause or reduction in payments during hardship, meant to bridge a short-term setback rather than resolve a permanent affordability problem.

An agreement to catch up on missed payments by adding a manageable extra amount to your regular payment over a set period, rather than paying a lump sum.

Selling the home for less than what's owed on the mortgage, with the lender's approval. This avoids foreclosure on your record, though you may still owe a deficiency balance unless the lender agrees to waive it.

Voluntarily transferring the property title to the lender to satisfy the debt, avoiding the foreclosure process itself — though this still impacts your credit and requires lender approval.

If you have sufficient equity, selling the home on the open market before foreclosure proceedings advance too far can let you pay off the mortgage and potentially keep remaining proceeds.

Chapter 13 bankruptcy can allow you to catch up on mortgage arrears over a 3–5 year court-approved plan while keeping your home, since the automatic stay halts foreclosure proceedings during the case.

HUD-approved housing counselors provide free guidance on all of these options and can help you determine which fits your situation before decisions become time-limited.