If mortgage payments are unaffordable or past due, contact the mortgage servicer promptly and ask about available loss-mitigation options. The choices and deadlines depend on the loan, servicer, and case status. This guide provides general information, not a prediction that a particular option will be approved or stop a pending case.
Option 1: Contact Your Lender Immediately
Contact the mortgage servicer as soon as possible, explain your situation, and ask what loss-mitigation options and deadlines apply. Keep records of communications and submit requested documents by the stated deadlines. Options and eligibility depend on the loan and circumstances.
Possible loss-mitigation paths may include forbearance, a repayment plan, or a loan modification. Terms differ; ask the servicer to explain in writing what happens to missed payments, the loan balance, interest, and future monthly payments before agreeing.
For independent help understanding options, contact a HUD-approved housing counselor through the CFPB counselor finder or HUD's housing counseling program. The CFPB's mortgage-help page also explains how to find foreclosure help.Sources: CFPB housing counselor finder; HUD housing counseling program; CFPB mortgage-help resources
For property-specific considerations, review our guidance on selling a Chicago house as-is. Local records and occupancy questions are also discussed for selling a home in Berwyn and selling a property in Logan Square.
Option 2: Refinance Before It Is Too Late
Refinancing may be considered in some circumstances, but eligibility depends on the borrower, loan, lender, and current payment status. Do not assume refinancing is available or will resolve a foreclosure case; ask the servicer and a qualified housing counselor to review options.
A HUD-approved housing counselor can provide independent guidance, often at little or no cost. Use the CFPB's counselor finder or HUD's housing counseling program. Program availability changes, so verify any assistance directly with the administering agency.Sources: CFPB housing counselor finder; HUD housing counseling program
Option 3: Short Sale Your Chicago Home
A short sale is a sale for less than the outstanding mortgage balance that requires the servicer or lender's agreement. Approval, lien release, and the treatment of any remaining balance must be addressed in the written agreement. The CFPB advises borrowers to ask whether a deficiency will be waived and to obtain any waiver in writing.Sources: CFPB: What is a short sale?
Do not rely on a short sale to produce a particular credit-report result or future loan eligibility. Ask the servicer how it will report the account and consult a HUD-approved housing counselor about the available options and consequences.
A short sale may be considered when the expected sale proceeds will not cover the secured debt, but approval and terms are case-specific. Compare the available alternatives with the servicer, a housing counselor, and legal or tax advisers as appropriate.
Option 4: Consider a Sale Before Foreclosure
A sale may be an option if the property has sufficient equity, but the contract, title requirements, payoff amount, and any court deadlines determine whether it can be completed in time. A cash offer does not itself stop a foreclosure case; confirm the payoff and required steps with the servicer, attorney, and title professional.
If sale proceeds are insufficient to pay all secured debt and costs, the remaining balance and any release or deficiency terms need to be addressed with the relevant creditor in writing. Do not assume a voluntary sale guarantees a particular credit result or eliminates other obligations.
For independent help reviewing foreclosure-prevention options, contact a HUD-approved housing counselor through the CFPB or HUD.Sources: CFPB housing counselor finder; HUD housing counseling program