Alternatives to Foreclosure

by Jamie L. Harris

If you are facing a foreclosure suit and are concerned about getting the most value for your home to reduce any potential deficiency claim, there are a number of alternatives to foreclosure:

  1.  Private Sale.  If you can find a buyer for your home prior to the actual foreclosure sale, you can avoid a sale of the home on the courthouse steps.


  1. Forbearance Agreement.  If you need some time to market your home, the bank may be willing to enter into a forbearance agreement with you to enable you sufficient time to market the property.  As a condition of the bank’s agreement to forbear from collecting against you, the bank may request payments during the forbearance period.


  1. Deed in Lieu.  In order to avoid the costs of foreclosure, the bank may be willing to accept a deed in lieu on the property.  Typically, a deed in lieu will only be practical when the bank is the sole lienholder on the property.


  1. Short Sale.  If you are able to find a buyer for your property, but the offer is less than the amount owed on the home, then a short sale may be your best option.  Typically, the lender(s) will require you to submit various financials and a hardship application to verify your eligibility for the short sale.  If multiple lenders are involved, all will have to agree to the terms of the short sale.


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