Holistic Options to Avoid House Foreclosure
- Adam Garrett
- Jul 16
- 25 min read
Updated: Jul 18
Below, I'll be covering options to try to keep your house when behind on payments as well as options to keep more equity than you would otherwise if you must sell or opt to sell despite having alternative options.
I. What to Beware of
II. Options to Help You Retain Your Home No Matter Your Mortgage Type
III. Programs to Help You Retain Your Home for FHA Mortgages
IV. Programs to Help You Retain Your Home for VA Mortgages
V. Programs to Help You Retain Your Home for Conventional Mortgages
VI. Options for Increased Funds
VII. Options if You Need to Sell
I. What to Beware of:
Importance of Timing
Keep in mind that some options (i.e. a refinance) will be best before you're behind on your 1st payment, while other options might require you to be behind on payments before your eligibility for assistance kicks in. It's best to know which approach to pursue before you're 30 days behind on a payment, & in many cases, it will be best to take at least some of the steps below immediately even if you purposely wait for other steps based on the best timing.
Beware of Scams
There are a number of scams involved with foreclosure relief, so be certain that you are working with trust sources. In 1 case I encountered a seller who appeared to fall for one of these scams, losing substantial equity in her home. If in doubt, contact the real estate agent who helped you purchase your house so that they can investigate. Even high knowledgeable people can be more prone to fall for scams in desparate circumstances.
Related:
"We Buy Houses - You Lose Out"
I have an article dedicated to why selling to an off-market purchaser who reaches out to you when you are facing foreclosure is typically a very bad idea, where you typically get much less than you would otherwise or where you can encounter a high-risk or other bad situation. Here are some of the reasons why:
Off-market purchasers may use pressure sales tactics, giving you a short deadline on their offer.
Off-market purchasers, if paying cash, will need to justify it by having a large discount that will help them both mitigate their own risks and help justify the time & money spent on finding you and getting you to come to the table as well as the total cost of sale.
They often tout paying your closing costs and you incurring no real estate agent fees, but that's because they're getting such a heavy discount where all those funds plus more will be needed for it to be worth the buyer's time to buy from you.
There are many ways that sellers can sell quickly, even if their home is in repair, on the open market for more than what an off market seller would sell for.
Potential Negative Impact of Sale or Renting Out Home on Benefits Like SSI, SSDI, Medicaid
If you vacate your home & rent it out, you may no longer qualify for certain government benefits like SSI, SSDI, & Medicaid due to non-home assets that aren't protected like homes are. Increased rental income may have a negative impact on benefits. If you sell your home, the cash in the bank could also diminish your options due to your assets. When weighing options where you'd vacate your home, keep these matters in mind.
If you do end up selling and are seeking to diminish your counted assets that might otherwise disqualify you in order to be eligible for certain benefits, consider an ABLE account. "Up to $100,000 of ABLE funds is not a countable resource for Supplemental Security Income (SSI). Any amount of funds in an ABLE account up to the state plan limit does not affect someone’s current or future eligibility for programs like FAFSA (Free Application for Federal Student Aid), HUD (Housing and Urban Development), SNAP (Supplemental Nutrition Assistance Program), Medicaid, Medicare, SSDI (Social Security Disability Insurance) or VRS (Vocational Rehabilitation Services)."
However, annual contribution limits to ABLE accounts apply which can greatly diminish the amount you put in it from a sale. In 2025, "An annual total of $19,000 can be contributed into the ABLE account by the person with a disability or from:
Friends and Family
Special Needs / Pooled Trust
529 College Savings Account rollover
In addition, an ABLE Account Owner who resides in the continental U.S. and who works and does NOT participate in an employer sponsored retirement plan – within that calendar year – may contribute up to an additional $15,060 from their earnings into their ABLE account. It is higher for residents of Alaska: $18,810 and Hawaii: $17,310."
Negative Impact of a House Foreclosure, Short Sale, & Late Payments (Typically High Impact for 7 Years)
The ability to buy another house, your insurance rates, other financing, & even certain jobs (i.e. military) & security clearance is often significantly impacted by a short sale or foreclosure. Between late payments and a foreclosure or short sale, great credit can go easily go down by over 100 & in some cases by over 200 points. While there may be steps you can take to improve it, and it will tend to very gradually improve over time, it may remain relatively close to that number until it's off your credit report if you previously didn't have much negative information on your credit report beforehand.
Per Experian on short sale credit impact duration, it will remain on your report for seven years.
Per CFPB in an article of the impact of a foreclosure, foreclosure information stays on your credit report for 7 years.
Per another CFPB article on duration of negative credit items, lawsuits & judgements can be reported for 7 years or until the statute of limitations runs out.
Negative Impact of Bankruptcy (10 Years)
Per CFPB in an article on bankruptcy credit report duration, "Your bankruptcy will stay on your credit report up to 10 years if it’s filed under one of the following chapters of the Bankruptcy Code:
Chapter 7
Chapter 11
Chapter 12
Chapter 13
In certain instances, bankruptcy can be reported beyond 10 years."
You Might Still Owe Money Even After Foreclosure or Short Sale
Not every case of foreclosure or short sale has the former owner forgiven after it's all over. If pursuing a short sale or foreclosure, be sure to find out early on in the process, if at all possible, whether or not you'd need to pay back funds remaining that are owed even after a short sale or foreclosure.
II. Options to Help You Retain Your Home No Matter Your Mortgage Type
Pursue Multiple Paths at Once
It's best to have a multi-pronged approach in avoiding foreclosure in case certain options you're pursuing don't work out. After you apply for one option, don't want to pursue alternatives.
Apply for a mortgage forbearance. or other means of need/hardship-based lowering of your mortgage
If you're facing temporary financial difficulties, especially due to natural disaster, medical problems, or other unusual circumstances, see if there are any options for a break on your mortgage from the government, a non-profit, or your existing mortgage company.
See (PDF) HUD's "Homeowner's Guide to Success: What to do if You Can't Pay Your Mortgage"
Your lender is one of the 1st people you should contact if you're facing missed payments or low payments. They may be aware of programs that you might qualify for, some of which are lender-specific and not listed out of the programs in this article further below.
One non-profit that might be able to help is NACA, that has a few programs to choose from. If you already have a NACA mortgage, they can help even further, but assuming you don't, NACA's Homeowner Assistance program includes provisions where "the NACA Advocate provides counseling to determine an affordable mortgage payment and works directly with the lender/servicer to achieve a long-term affordable solution." They also provide refinance options for refinancing & rehabbing. Their rates are below market rates & there's no closing costs.
If you get a NACA mortgage, they're more lenient than many lenders. That's one of the top reasons why they have "an extremely low foreclosure rate of 0.0001183 (i.e., about one-hundredth of one percent)." That's despite the fact that credit score is not considered for a NACA mortgage, even though there are some credit related requirements.
Be mindful that if you do switch to a NACA mortgage, there are some unusual requirements and restrictions. For instance, owner occupancy is required throughout the life of the loan & you'll need to do a bit of volunteering each year you have the loan, though even something as simple as social media shares about NACA can satisfy the volunteering requirement.
Consider Refinancing your loan, especially if mortgage rates when you face foreclosure are lower than your current rate & you haven't missed a payment yet.
Often, this process can be done with no $ out of pocket. You could refinance with a cash-out refinance or with a no cash-out refinance.
In some cases, a refinance for an unusually high timeline is available. While I'd generally recommend avoiding refinancing to a higher interest rate, there are some cases where a higher interest rate could still lower your payment, especially if it extends the lifetime of the loan substantially (up to 40 years in some cases when a hardship is involed).
While it's a good idea to speak to your lender, it's a good idea to speak to your experienced real estate agent as well before making a move. For instance, a lender may want you to refinance rather than recast your loan, as your lender will likely receive a commission if you refinance, while they may not if you recast your loan.
While your current lender may be the best option, there may be lower-cost alternatives with other lenders, especially if you qualify for a promo refi rate that will last for the life of the loan.
Consider Lowering Payments via Recast When Prevailing Rates are Higher than or Similar to Yours & You Have Some or Can Get Some Funds
Consider Recasting your loan for a more affordable payment with a lump sum payment or if you've paid more than necessary by a large margin in the past.
A recast can make more sense especially if the rate you have is lower than the current rate available & if the best savings, CD, or bond rate available is effectively lower than your current mortgage rate (not your mortgage APR, but the actual rate), after accounting for tax differences. As of 4/21/25, my best savings rate available out of accounts I have where the interest applies over $1k is my account with CFG (4.32% APY), which is FDIC insured. The <$1k best rate I have (5.5% APY) is with DCU (insured by NCUA, the credit union equivalent of FDIC).
If having difficulty acquiring the funds to recast, cnsider other alternatives as well for quick funds described in this article.
Adjust Your Budget & Speak to Housing Financial Crisis Counselors
Get some of the Budgeting tips that Adam's published.
If you're Adam's former client or about to be Adam's client, feel free to ask him for a free budgeting consultation after going through his article, beginning to implement those principles, and emailing him about the steps you've taken prior to going through his article and based on his article.
See HUD's Housing Counseling Services Lookup
There are a number of free budgeting resources available to the public. Here are just a few in Hampton Roads:
The closest offices for many are in Chesapeake & Newport News
Call (757) 484-0703 to schedule a budget counseling session
Consider Other Ways to Reduce Your Payments & Other Home Expenses
Check to see if you would qualify for real estate tax deferral or relief.
Check to see if you would qualify for Assistance with Utility Bills.
If you're struggling to keep up your home due to repair needs, seek out government &/or non-profit assistance.
Check to see if there are ways that you can Save on Taxes
Check to see if there are other $ Savings Tips that you'd benefit from.
Consider Hiring a Foreclosure Attorney
While this option isn't for every situation, a foreclosure attorney in some cases can be an invaluable asset to you. I recall one occasion where an attorney told a seller I was working with that based on her unique situation, it would be better to let a home foreclose than to continue with a short sale.
Look for Non-Profits Who Might be Able to Help
Have you been paying tithes to your church for decades? While it won't always help, that background could be very beneficial if you're facing hard times.
Need Help Paying Bills: Emergency Financial Assistance Programs Near You, by State
If you're active duty military, a veteran, there are special options available for paying your mortgage
There are a number of options for financial help for those who are disabled
Whatever your niche scenario, see if there are options specific to your situation that might be beneficial.
While bankruptcy should be one of the last resorts considered, if all superior options fail, for some it can stall a foreclosure, as it did for a former client of mine who listed their home with me for short sale, and in other cases, it's a way to keep the home.
Per NOLO (link above): "Chapters 7 and 13 will stop a foreclosure and can be helpful depending on your needs. However, the benefits you'll receive will differ significantly.
Chapter 7 can delay foreclosure temporarily, but nothing more. If you want to delay foreclosure by a few months but are willing to let go of your home, filing for Chapter 7 will be an option.
Chapter 13 can save your home from foreclosure. If you want to keep your home, consider filing for Chapter 13. People who can afford a hefty monthly Chapter 13 payment can catch up on late payments and keep their homes."
See the "Options for Increased Funds" & the mortgage type-specific sections below as well.
III. Programs to Help You Retain Your Home for FHA Mortgages
FHA Mortgages: Payment Supplement Loss Mitigation Home Retention Solution
Per HUD, "The Payment Supplement allows servicers to bring the borrower’s mortgage current and temporarily reduce the principal portion of their monthly mortgage payment for a term of three years without modifying the mortgage. The Payment Supplement is only repaid when the borrower sells or refinances the home, or the mortgage is otherwise extinguished."
"The following... Payment Supplement documents... are located on the Single Family Model Documents web page on hud.gov:
• Annual Payment Supplement Disclosure
• Final Payment Supplement Disclosure
• Payment Supplement Agreement Rider
• Payment Supplement Promissory Note and Payment Supplement Security Instrument.
...A Payment Supplement Calculation Worksheet (is) available on the FHA SF Loss Mitigation web page as a tool to assist servicers in calculating the Payment Supplement.
Mortgage servicers... must implement this solution by January 1, 2025."
FHA Mortgages: Home Affordable Modification Program (mostly suspended through 4/30/25)
Per HUD:
"FHA Home Affordable Modification Program (HAMP): All FHA-HAMP Options are temporarily suspended through April 30, 2025, except for non-borrowers who acquired title through an exempted transfer. All other borrowers must be evaluated for the COVID-19 Recovery Home Retention Options. FHA-HAMP is designed to help a borrower who meets HAMP eligibility requirements to avoid foreclosure by establishing an affordable monthly mortgage payment to a level sustainable by the borrower's current income through the use of one of the following:
Standalone Loan Modification: Resolves the outstanding mortgage payment arrearages by adding it to the principal loan balance of the first mortgage and extends the term of the mortgage to 360 months at a fixed interest rate.
Standalone Partial Claim: Allows mortgage payment arrearages to be placed in a zero-interest subordinate lien against the property. The Partial Claim amount does not require payment until the last mortgage payment is made, the loan is refinanced, or the property is sold, whichever occurs first.
FHA-HAMP Combination Loan Modification and Partial Claim: The FHA-HAMP Combination Loan Modification and Partial Claim establishes an affordable monthly payment, resolves the outstanding mortgage payment arrearages, and permanently modifies the first mortgage monthly payment. The Partial Claim is a zero-interest subordinate lien that will include a portion of the amount to be resolved and if you meet the requirements, a principal deferment. The remainder is added to the principal loan balance of your first mortgage and extends the term for 30 years (360 months) at a fixed interest rate."
FHA Forbearance Options
Per HUD:
"Informal or Formal Forbearance Plan: A Forbearance plan allows a borrower to work with their mortgage servicer to temporarily pause or reduce their monthly mortgage payments and may provide specific terms for repayment.
Special Forbearance (SFB)-Unemployment: SFB is available when one or more of the borrowers have become unemployed and this loss of employment has negatively affected the borrower's ability to continue to make their monthly mortgage payment. The servicer will re-evaluate the borrower for a permanent Loss Mitigation Option to cure a Default once the borrower is gainfully employed and/or the SFB-Unemployment Agreement expires."
FHA & Covid-19
Per HUD:
"COVID-19 Loss Mitigation
FHA offers COVID-19 Recovery Options to eligible borrowers who are 61 days or more delinquent through April 30, 2025.
For details on COVID-19 Loss Mitigation visit COVID-19 Recovery Loss Mitigation Options For FHA Homeowners."
FHA Mortgage Additional Counseling/Contact Options
Per HUD:
"FHA staff are available to help answer your questions and assist you to better understand your options as an FHA borrower under these loss mitigation programs. There are several ways you can contact FHA for more information, including:
Call the FHA Resource Center at 1-800-CALL FHA (800-225-5342)
Avoiding Foreclosure
Visit our knowledge base to obtain answers to frequently asked questions 24/7 at www.hud.gov/answers
E-mail answers@hud.gov
Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339"
per HUD, "Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA's National Servicing Center toll free at (877) 622-8525, or via email. Whether by phone or email, be prepared to provide the full name(s) of all persons listed on the mortgage loan and the full address of the property including city, state and zip. We may be able to help you more quickly if you can also provide your 13-digit FHA case number from the loan settlement statement."
IV. Programs to Help You Retain Your Home for VA Mortgages
Per VA.gov, "If you’re having trouble making your mortgage payments, contact your loan servicer right away. They will work with you to try to find a solution to your situation.
If you’re nervous about contacting your servicer, or if you’d like our help and advice, please contact a VA loan technician at 877-827-3702. You can also send us a message online through our home loan guaranty support portal.
VA Repayment Plan
Per VA, "If you’ve missed a few mortgage payments, this plan lets you go back to making your regular payments, with an added amount each month to cover the ones you’ve missed."
VA Special Forbearance
Per VA, "This plan gives you some extra time to repay the missed mortgage payments. Missed payments aren’t automatically added to the end of your loan. You must contact your servicer to discuss how you’ll make payments after the special forbearance ends."
VA Loan Modification
Per VA, "Sometimes you need a fresh start. This plan lets you add the missed mortgage payments and any related legal costs to your total loan balance. You and your servicer then come up with a new mortgage payment schedule. Note: Due to rising interest rates, the modified payment amount could increase."
VA Servicing Purchase Program
Per VA, "Starting May 31, 2024, if you have a VA-guaranteed loan, you may be able to participate in the Veterans Affairs Servicing Purchase (VASP) program. Through VASP, VA buys the modified loan through your loan servicer. Your servicer must first have tried all other options to help you keep your home.
Help for Veterans & Surviving Spouses of Veterans Even if You Don't Have a VA Loan
Per VA.gov, "If you’re a Veteran or the surviving spouse of a Veteran, we’ll (the Department of Veterans Affairs) provide counseling—even if your loan isn’t a VA-guaranteed loan."
After Foreclosure, Will I Need to Pay VA Back? What About My Future Loan Benefit?
Per VA, "If I can’t avoid foreclosure, will I have to pay back my loan?
If your loan closed before January 1, 1990, and we have to pay back the amount of your loan to the servicer, you may need to pay this amount back to the government. If you can’t repay a VA debt, you may be able to get a waiver. Learn more about waivers for VA debt
If your loan closed on or after January 1, 1990, and we have to pay back the amount of your loan to the servicer, you’ll need to pay this amount back to the government if we find evidence of fraud, misrepresentation, or bad faith on your part.
How does foreclosure affect my future home loan benefit?
If your loan ends in foreclosure, short sale, or deed in lieu of foreclosure, you’ll need to pay back the amount we lost on your loan to restore your future benefit. We call this process “restoration of entitlement.”
To find out the amount you need to pay to restore your entitlement, contact a VA loan technician at 877-827-3702."
VA Loans & Natural Disasters
See VA's Guidance on Natural Disasters
"INFORMATION FOR VETERAN BORROWERS
If you have a VA loan and your home was affected by a natural disaster, we encourage you to take the steps listed below to ensure you receive the assistance you need.
(1) Contact FEMA (Federal Emergency Management Agency)
Begin the disaster application process online at www.DisasterAssistance.gov or by calling 800‐621‐3362. In order to receive the maximum assistance, you must register with FEMA before their deadline expires. Do not pay your loan in full before checking with the Small Business Administration (SBA) regarding a loan for the uninsured portion of your loss. Additional support, including low‐interest loans, cash grants, and housing assistance may be available from agencies associated with the disaster recovery effort. For more information, go to www.fema.gov.
(2) Contact Your Mortgage Company
You are responsible for making regular monthly loan payments, even if your home is not habitable, so contact your lender as soon as possible regarding your loss. If you are unable to make payments on time, we encourage you to discuss forbearance or a loan modification. Also have your lender explain procedures for insurance loss checks, repairs to your property, payments to contractors, etc.
You may also contact VA at 877‐827‐3702 to speak with a Loan Specialist about your options.
If your home was adapted through VA’s Specially Adapted Housing program, please contact us at 877‐827‐3702 as supplemental grant funds may be available to help with repairs.
(3) Contact Your Insurance Company
File an insurance claim as soon as possible; however, do not make a hasty settlement on insurance. When the property is damaged but repairable, attempt to get your local engineer’s office to inspect your home for structural damage. If possible, get at least two estimates from licensed contractors for cost of repairs or rebuilding. ‐‐ Insurance checks for personal property and living expenses should be payable to you only. Checks for damage to your home should be payable to both you and your mortgage company.
(4) Change your Address
If you are receiving a monthly benefit check from VA or another source and you will not be able to receive mail at your regular address, notify your local post office and VA Regional Office (http://www.benefits.va.gov/HOMELOANS/contact_rlc_info.asp)of your change of address. For information on other VA benefits, call 800‐827‐1000.
(5) Check Other Sources for Assistance
Contact local offices of the American Legion, Veterans of Foreign Wars, Disabled American Veterans (DAV) or other veterans’ organizations to see if special assistance may be available, even to non‐members of the organization."
VA Mortgage Additional Counseling/Contact Options
Per VA,
Play our video to learn about your options for trying to avoid foreclosure (YouTube)
Note: This video addresses 2 topics. The first part of the video is a reminder to change your address when you move. The second part outlines your options for trying to avoid foreclosure.
Read the consumer advisory that the Consumer Financial Protection Bureau (CFPB) posted about how to identify a foreclosure relief scam. Learn about the advisory on the CFPB website
Find out how the Homeowner Assistance Fund (HAF) helps Veterans and their families who are behind on their mortgages and other housing-related expenses due to the impacts of COVID-19. Learn about the HAF on the National Council of State Housing Agencies website
Schedule a free consultation with a credit or financial counselor through our Veterans Benefits Banking Program (VBBP). Get more information about financial counseling on the VBBP website"
See the VA Home Retention Waterfall
V. Programs to Help You Retain Your Home for Conventional Mortgages
Conventional Mortgage Additional Counseling/Contact Options
Per HUD, "If you have a conventional loan, first talk to a HUD-approved housing counselor at (800) 569-4287. They may be able to help you with your lender. You can also contact HOPE NOW or call the Homeowners Hope Hotline at (888) 995-HOPE to ask for assistance in working with your lender."
Seek Out your Lender
In addition to your lender, see Fannie Mae & Freddie Mac options depending on your conventional loan if it is conforming.
VI. Options for Increased Funds
Especially if you have family or otherwise that you can temporarily move in with, have access to a shelter or transitional home, or seek alternative options for unconventional housing (see "Non-Traditional Housing" on my homeless resources page) or discounted rent you'd qualify for, renting out your house, especially if the rent would be higher than the mortgage, is a viable alternative to foreclosure.
That said, when association-related rental caps or certain loan restrictions are in place, this task can have some extra hurdles to overcome, so be sure to check on whether or not you can rent out your home.
Also, be sure to get educated on renting your house out first, especially if you don't hire a property management company, but even if you do to a lesser degree. I have seen some horror stories played out.
While Zestimate accuracy can be far off, it's a good idea to check a rental Zestimate before checking with a real estate property manager.
Sometimes those facing foreclosure haven't yet explored or haven't maximized their options for renting out their non-owner-occupant house or renting a portion of their home. While many wouldn't consider this option, & sometimes it's not allowed, one unconventional approach is to rent out rooms from your house while you live there as long as you do it right. If you rent out rooms or your whole house on a short-term basis, even higher profit margins are possible, though you increase your risks and monitoring needs as well.
Seek Disability Benefits
If you're behind on payments due to disability, and might qualify for disability benefits, seek them out. If you get these, they can sometimes bring a windfall of income. That said, beware of the negative impact on certain benefits if you sell or rent out your house that I mention in the beware section.
Consider Other Ways of Increasing Your Income Via Your Occupation or Side Work
While not everyone will be in a good position to accomplish this task, some are in a good position to increase their income, whether by:
Apply to positions that are at other employers (which in some cases can include a signup bonus)
Request a salary increase with your current employer
Take on overtime with your current employer
Get additional part-time employment as an employee
Get additional part-time employment as someone who is self-employed,
In some cases, education can increase prospects at work, which can be particularly helpful in the long run for those who have scholarships available & are in work (i.e. many educators) where automatic salary increases are in order based on education levels. However, education increases are typically a more long term prospect than a short-term one when faced with foreclosure.
Drive for Uber or Lyft if you and your vehicle would qualify (especially if meeting qualifications while a low depreciation vehicle, reliable, clean, & high miles per gallon)
Tap Your Retirement Account
Consider tapping your Roth IRA if you're able to do so penalty-free, such as some cases if you're over 59.5 years old & have owned it for 5+ years or some cases if you have one that's over 5 years old and you are only withdrawing principal contributions. Other retirement accounts can also sometimes be tapped, but be sure to know what penalties may apply (especially if you wouldn't have the option to get an employer match anymore until the debt is repaid).
Pay Your Taxes if Expecting a Refund
Especially if expecting a tax refund, and you're able to file your taxes, paying them can sometimes pocket you some extra cash, especially if you're looking at reduced income vs the prior year, business or investment losses, or tax credits or refunds that you weren't eligible for before.
Reach out to Family, Friends, & the Public
This one can be difficult for many, but if you're facing foreclosure, it can totally be worth it to reach out to others for support to help you get through a tough situation. Whether using social media, calling people, a mailer, a house saving party like the end scene in It's a Wonderful Life, or more, see what can happen to save your home.
Doing this right includes:
Sharing what happened
Giving people options to help you (especially if you include both opportunities to hire you for work and to give money)
Providing methods for people to have little reason to doubt you (i.e. letter from the bank with your address on it about a missed payment, striking any sensitive information like loan number or social security number)
Sharing with people what you're doing to get yourself out of the situation
If you're reaching out to family, and it's your parent(s), consider asking them if they can give something to you now that would take away part of any inheritance that you might receive in the future.
Substance Abuse
If substance abuse (both the cost & the impact) is negatively impacting your ability to keep your home and keep income, get help as soon as possible. Even if you are on a prescription medication, don't rule it out as a potential negative, and if you suspect it's your medication, consult your doctor and consider a second opinion if they dismiss your concerns. Also, check to see if the medication or substance you are on tends to have the effects that you are experiencing that may negatively impact your finances.
Time management and finances are too seldom linked, but the 2 are completely intertwined. If you drastically improve time management, your finances can drastically improve in the majority of cases. Those who time management impacts the most are those who are not employed hourly and those who do not work at least 40 hours a week or where they don't record the amount of time that they work.
Some good methods I often or always employ include:
A working calendar including for work, errands, and for rest
Recording times on tasks completed
Accountability with others has shown massive statistical significance with people, yet many people think it's "beneath them" while shooting themselves in the foot because of the absence of it.
Habitshare (for tracking daily, weekly, etc. habits with friends)
Focusmate (for co-working with someone else virtually after stated goals at the beginning, progress at the end, and written options in between)
Sleep, Excercise, & Diet
Sleep, diet & exercise can have a major impact on your mind and body. Don't neglect these in order to get in a better place financially. It could very easily backfire.
Mental Health & Replenishment & Encouragement
Facing foreclosure can be a depressing feeling. Be sure to be cognizant of your mental health and seek means of improving it. Don't be satisfied with anaestetitizing behaviors without positive benefits like random scrolling on your phone. Be sure to experience rejuvenating and replenishing rest. These may include but may not be limited to the following:
Silence where you have your eyes closed or where you're walking, kayaking, or spending time in nature without too many people in places like certain trails in Newport News Park
Prayer
Meditation
Wisdom literature, i.e. Proverbs, that invites one to wisdom while speaking often in terms of what is probable by cause & effect.
Calming literature, i.e. Psalms
Time with friends - isolation can make someone depressed
Mental Health & Professional Assistance
If you have a clinically diagnosed disorder, it's an easy path to getting weekly assistance from a professional. Even if you don't have a disorder, whether one you're aware of one that you're not aware of, it's not unusual for those facing foreclosure to experience situational depression, which insurance will often cover. Some insurance companies even have options for online counseling that in some cases can be absolutely free with no income cap, like my plan with Anthem Healthkeepers Gold.
Bad Tenants
If bad tenants are your problem for facing foreclosure, get help from a property manager if you don't have one already, and get educated on property management. If you already have a property manager and they aren't doing their job in your opinion, get another professional involved like a foreclosure attorney.
Address Other Underlying Issues
If your mental health is troubled about something other than the foreclosure, sleep, a mental or physical disability, or other issues above, consider addressing the issue, especially if you find yourself limited in your work because of it. In some cases, delaying it for the sake of needing to do more work can be self-sabotaging.
Rent or Sell Personal Property
If you have substantive personal property, consider selling some or renting it. In some cases, if you do it wrong, just like with house rentals, these can be self-sabotaging, i.e. if you sell that which is critical to your livelihood, you don't integrate good marketing nor adequate protections from fraud, theft, or damage. If you're going to employ these methods, be sure to do your homework on what items are selling or renting for, basic marketing like great pictures, great titles, great descriptions with plenty of details, & multi-platform posting on the platforms that would get the most traffic that can highly depend on what you're renting or selling.
Sell Other Real Estate
If you have more than one piece of real estate that you have equity with, consider the prospect of selling it to assist with a temporary low-income scenario, to help with a recast of a loan, &/or to open opportunities to receive benefits that non-home real estate assets might prohibit.
If You Have Whole Life Insurance
See if you're eligible to withdraw cash from your life insurance policy, weighing the pros and cons of doing so. In many cases, it won't be possible to withdraw funds within the 1st 2 years.
VII. Options That Involve Giving Up Your Home
Sale for Profit
When selling, it's typically best done on the open market with an experienced real estate agent who can guide you through the process of selling & provide resources to you often with no out-of-pocket expenses for their marketing until closing time, rather than off-market (off-market typically means you get less $).
In some cases, lending firms will give you additional time before foreclosing if you let them know that you plan to arrange a sale & demonstrate that you are taking active steps toward that end over time (i.e. providing a signed listing agreement with an agent). This delay is option 5 under VA's list of ways to avoid a foreclosure.
In some cases, real estate firms like mine can help you catch up on your payments as a way to help delay the foreclosure process as part of a selling package, where we would get the funds we fronted back plus some reasonable interest on that at the time of sale.
If you plan to sell for profit, it's best to act quickly to get an agent and prepare your home's interior & exterior for sale.
Consider a Short Sale
A short sale is when the amount that you owe on a property exceeds the net proceeds that you would get from the sale of the property.
A short sale has a lower impact than a foreclosure on your credit, according to Kelly Legal Group. Experian also points out that some short sales are possible without a single missed payment, which would further bolster your credit vs otherwise.
It's best to hire a real estate agent who knows short sales and to hire a short sale attorney to help you along the way.
Short sales require lender approval, & are only possible under certain circumstances.
Reportedly the options to buy after a short sale are better than with a foreclosure.
For FHA Mortgages, per HUD on Loss Mitigation Services,
"If the borrower does not qualify for any of the FHA Home Retention Options and the property sales value is not enough to pay the loan in full, the servicer may be able to accept less than the full amount owed by approving eligible borrowers for a Pre-Foreclosure Sale, also known as a short sale."
For VA Mortgages seeking to short sale, per VA,
"This option could result in a loss or reduction in your future home loan benefit. Contact a VA loan technician at 877-827-3702 for more details."
Deed in Lieu of Foreclosure
FHA Mortgages, per HUD on Loss Mitigation Services, "If the borrower is unable to complete a PFS transaction at the expiration of the PFS marketing period, they may be able to voluntarily offer to deed ("give back") the property to HUD in exchange for a release from all obligations under the Mortgage."
For VA Mortgages, per their help page on avoiding a foreclosure,
"This option could result in a loss or reduction in your future home loan benefit. Contact a VA loan technician at 877-827-3702 for more details."
In Any Case When Giving Up Home, Don't Neglect the House
Be sure to not neglect the house. The more you neglect it, the worse it can be on you, especially if you would owe debts after sale or would receive less funds because of sale.
Disclosure: Please keep in mind that I am not a CPA or financial advisor and that I am not providing tax advice.
Related:
Comments