Facing foreclosure: options to review before you sell

How foreclosure works and why timing matters

After missed payments, a servicer typically sends notices, and if the loan is not brought current or resolved, it may begin a foreclosure through the courts or under the terms of the loan documents, depending on the state. Each stage has deadlines, and some options become harder as the process moves forward. A pending sale does not stop a foreclosure by itself. Only the servicer, a court, or another lawful process can change the schedule, so keep talking to your servicer and get any agreement in writing. The earlier you act, the more options you are likely to have.

Documents to gather

Organize these documents before calling the servicer, a counselor, or an attorney. Having the notices and figures in front of you makes each conversation more productive and helps you understand which deadlines are closest. Write down the date, name, and summary of every call with the servicer, and ask for important answers in writing. If you have applied for help before, keep those applications and responses as well.

• Every notice from the servicer and any court papers
• Recent mortgage statements and a reinstatement or payoff quote
• Proof of income and a basic household budget
• Property tax, insurance, and association records
• Any loss mitigation applications and responses
• An estimate of what the house could sell for

Options and trade-offs

Options may include reinstating the loan, a repayment plan, forbearance, or a loan modification; your servicer can tell you which are available. If you have equity, selling the house before the foreclosure is complete may let you pay off the loan and keep the remaining proceeds. Listing with an agent can maximize price if there is time; a direct sale can reduce preparation and let you set a closing date. If you owe more than the house is worth, a short sale or deed-in-lieu requires the lender's approval and has credit and possible tax effects. A HUD-approved housing counselor can walk through these options with you, and a foreclosure attorney can explain your rights in your state.

Foreclosure rescue scams and other red flags

Homeowners facing foreclosure are frequent targets of scams. Never pay an upfront fee to anyone who promises to stop a foreclosure, never stop paying your servicer because someone tells you to pay them instead, and never sign over your deed without understanding what you are signing and getting independent legal advice. Ask any buyer for written terms, proof of funds, and the name of the title company, and confirm that company independently. Keep your servicer informed if you are pursuing a sale, and ask whether they need any documents to coordinate the payoff with the closing.

How a sale to Prominent Cash Offer works

If a sale is the right choice, Prominent Cash Offer buys houses as-is, so you do not need to repair or clean. If the property is a fit, you receive a written cash offer with the terms spelled out. There is no agent commission and there are no fees from us, and we pay the closing costs. You choose the closing date, and the closing is handled through a title company, which coordinates the payoff with your servicer. A sale does not stop a foreclosure by itself, so keep working with your servicer and counselor while you decide. There is no obligation to accept.