Behind on your mortgage? Here are your options.
Foreclosure feels like a freight train, but you have more time and more options than the bank lets on. A plain-English guide to what's on the table.
If a default notice arrived in the mail this week, the first thing to know is this: in most states, foreclosure has to move through a court — and even in the faster, non-judicial states, it does not happen overnight. You almost always have more time than the bank’s letter implies.
Here are the four options most homeowners have. Not all of them will fit, but at least one usually does.
1. Reinstate the loan
If the only thing wrong is that you’re behind on payments — but the underlying loan is still affordable — you can sometimes catch up the arrears and resume the original schedule. This works best in the first few months of missed payments, before legal fees pile on top.
Talk to your servicer’s loss mitigation department, not the collections line you’ve probably already been arguing with. Ask, in writing, for a reinstatement quote.
2. Loan modification
A modification rewrites the loan: lower rate, longer term, sometimes both. The point is to bring the monthly payment down to something you can sustain. Modifications take 60–120 days to process and require a lot of paperwork (tax returns, bank statements, a hardship letter).
If you have stable income and the home is otherwise affordable, this is usually the strongest play. Be patient — and document every conversation with the servicer.
3. Sell the house traditionally
If you have meaningful equity and you’re more than 90 days from the foreclosure sale, a traditional listing is still worth considering. You’ll likely net more than a cash sale.
A few cautions:
- Time. A traditional listing usually takes 60–120 days to close. If your sale date is two months away, the math gets tight.
- Repairs. Buyers with financing will require an appraisal and often inspections.
- Commissions. 5–6% of the sale price goes to agents.
4. Sell to a direct buyer
If you’re inside 60 days, or you don’t have the savings to fix up the house, or you simply want this stress to stop, a direct buyer like Birch is usually the fastest exit. We can close before a scheduled foreclosure sale and you keep your equity above what we agree on.
We’ve stopped foreclosures with as little as ten days to closing. We’ve also told sellers, more than once, that they should hold off and try a modification first.
“Birch was the only company we talked to that suggested we try a loan modification before selling. We tried it, and it worked. We didn’t have to sell after all.” — Karen S., verified seller
A note on “foreclosure rescue” scams
If anyone asks you to sign your deed over before closing, charges an upfront fee, or pressures you to skip getting independent advice — walk away. Most states have consumer protections that specifically prohibit this. Your state Attorney General’s website is a good starting point.
If you want to talk through your options with no pressure and no sales pitch, call us at (555) 555-0142. If we can’t help, we’ll tell you who can.
