Falling behind on your mortgage does not mean that there are not any options available. I can help you with a defaulted account because each mortgage servicer has programs in place to work with consumers to find a solution to the defaulted mortgage account. Generally, this is called a Loan Workout or Loss Mitigation, depending on the servicer. Mortgage companies want paying customers so it is in their interest to work with you to find an agreement that works for both parties. However, mortgage servicing companies will also not just start accepting payments again without a new agreement in place. Most agreements have one of three different outcomes: a loan modification, short sale, or deed in lieu of foreclosure.


Loan modifications are a restructuring of your mortgage payments into a new payment schedule. The modification will only be granted if the mortgage servicing company believes that you are going to have the ability to pay again and are likely to make timely payments in the future. This is based on your income and debt ratio to determine if you can start paying once again. Here you will start mortgage payments and retain your home.


A short sale occurs when you have fallen behind on your mortgage but there is no equity in the home. If you try to sell it you would have to actually bring money to the real estate closing to pay off the mortgage on the account. A short sale agreement is a contract you enter in with the mortgage servicing company to sell your house for less than what is owed, so that you can move on without having to bring that money to closing. Here you would sell the home, move, and no longer have the mortgage debt.


Deed in lieu of foreclosure is an agreement with the mortgage company where you will surrender the house over to them and they will release you of the mortgage debt. This often occurs when a reasonable offer for the property is not available so you would rather try to agree to an incentive with the mortgage company to move out and no longer have to worry about the mortgage. Sometimes this is an appealing option because the mortgage company is willing to provide a cash incentive to assist with moving.