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Options to Leave Your Home

When going through financial difficulties, you may face a tough choice — do you stay in the home you may no longer be able to afford or decide to leave?

If you’ve explored the available options for keeping your home and determined none will work for you, there are still ways to avoid foreclosure while moving on from your current home.

The key is to take action as soon as possible.

Contact your mortgage servicer — that’s the company you send your monthly mortgage payments to — and ask about options as soon as you anticipate difficulty making your monthly mortgage payments. Just walking away from your home and choosing foreclosure can seriously damage your credit.

Talk to a housing counselor at no cost to you

Prepare for a call with your mortgage servicer and learn more about which mortgage assistance options are best for you. Call 1-855-HERE2HELP (855-437-3243855-437-3243), or schedule an appointment.

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Explore ways to avoid foreclosure

If you have equity in your home, you may be able to sell the property and pay off the mortgage — while keeping the remaining amount to use for new housing or other expenses.

When the market value of your home is greater than the amount you owe on your mortgage and any other debts secured by the home, the difference is your home’s equity. Selling a home in which you have equity allows you to pay off your mortgage and keep any remaining funds.

  • This type of sale is useful if you’re facing a financial hardship and can no longer afford your mortgage payments or if you want to leave the home for other reasons.
  • In addition to paying off your remaining mortgage debt, selling with equity provides the most flexibility and avoids the credit damage caused by foreclosure.

Depending on the amount of equity, the remaining funds you keep from the sale can help you transition to new housing, pay for other expenses, or add to your savings.

A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the total debt remaining on your mortgage.

Even if you don’t think you can sell your home or have already tried unsuccessfully, your mortgage company may agree to a short sale. This way you can avoid foreclosure, sell your home, and pay off a portion of your mortgage balance with the proceeds. Depending on your situation, you may be required to make a financial contribution toward the balance. Once completed, you’ll get a “deficiency waiver” that relieves you of any further financial responsibility.

  • As an alternative to foreclosure, a short sale can be a great option if you owe more than your home is worth and are behind on your payments, facing a long-term hardship, and not eligible to refinance or modify your mortgage.
  • A short sale allows you to eliminate your remaining mortgage debt and avoid foreclosure. This option will cause less damage to your credit score compared to foreclosure. If you’ve already been referred to foreclosure, but the foreclosure sale has not yet taken place, a short sale may help you begin repairing your credit sooner.
  • In some cases, you could receive $7,500 in relocation assistance to use toward moving expenses for new housing.
  • You may also qualify for a new Fannie Mae home mortgage in as little as two years after the sale, compared to up to seven years for those who go through foreclosure.

If you have equity in your home, you may be able to sell the property and pay off the mortgage — while keeping the remaining amount to use for new housing or other expenses.

When the market value of your home is greater than the amount you owe on your mortgage and any other debts secured by the home, the difference is your home’s equity. Selling a home in which you have equity allows you to pay off your mortgage and keep any remaining funds.

  • This type of sale is useful if you’re facing a financial hardship and can no longer afford your mortgage payments or if you want to leave the home for other reasons.
  • In addition to paying off your remaining mortgage debt, selling with equity provides the most flexibility and avoids the credit damage caused by foreclosure.

Depending on the amount of equity, the remaining funds you keep from the sale can help you transition to new housing, pay for other expenses, or add to your savings.

A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the total debt remaining on your mortgage.

Even if you don’t think you can sell your home or have already tried unsuccessfully, your mortgage company may agree to a short sale. This way you can avoid foreclosure, sell your home, and pay off a portion of your mortgage balance with the proceeds. Depending on your situation, you may be required to make a financial contribution toward the balance. Once completed, you’ll get a “deficiency waiver” that relieves you of any further financial responsibility.

  • As an alternative to foreclosure, a short sale can be a great option if you owe more than your home is worth and are behind on your payments, facing a long-term hardship, and not eligible to refinance or modify your mortgage.
  • A short sale allows you to eliminate your remaining mortgage debt and avoid foreclosure. This option will cause less damage to your credit score compared to foreclosure. If you’ve already been referred to foreclosure, but the foreclosure sale has not yet taken place, a short sale may help you begin repairing your credit sooner.
  • In some cases, you could receive $7,500 in relocation assistance to use toward moving expenses for new housing.
  • You may also qualify for a new Fannie Mae home mortgage in as little as two years after the sale, compared to up to seven years for those who go through foreclosure.

Next steps

  • Contact your mortgage servicer. Tell them you’re interested in options to avoid foreclosure. Explain your current situation and reasons why this is a long-term problem. Your mortgage servicer will need to understand the reasons why you’re having difficulty in order to find the right solution for you. 
  • Contact a licensed real estate agent. You can also get help selling your home from a real estate agent directly. For short sales, tell your agent to visit HomePathForShortSales.com for information on the short sale process.

Your mortgage company wants to help you avoid foreclosure. The biggest mistake you can make is waiting to take action.

Note: If you are already behind on your mortgage payments, that debt will be included in the mortgage payoff amount to be paid as part of the closing process when you sell.

Already in foreclosure?

Mortgage Release™

You may be able to transfer ownership of your property to the owner of your mortgage and be released from any further financial responsibility.

With a Mortgage Release, also known as a deed-in-lieu of foreclosure, you can voluntarily transfer ownership of your home to your mortgage company and be released from any further payments or financial responsibility. You don’t need to be in foreclosure to pursue a Mortgage Release. Depending on your situation, you may be required to make a financial contribution to receive a Mortgage Release.

  • As an alternative to foreclosure, a Mortgage Release can be a great option if you owe more than your home is worth and are behind on your payments, are facing a long-term hardship, and are not eligible to refinance or modify your mortgage.
  • A Mortgage Release allows you to eliminate your remaining mortgage debt and avoid the negative impact of foreclosure. If you’ve already been referred to foreclosure, but the foreclosure sale has not taken place, it may help you begin repairing your credit sooner.
  • In some cases, you could receive up to $7,500 in relocation assistance to use toward moving expenses for new housing.
  • You’ll have the flexibility to gracefully vacate the home, stay in the home rent-free for up to three months, or lease the home at market rates for up to one year.
  • When you vacate the home by the agreed-upon date, the interior and exterior of the home must be in broom-swept condition and free of damage, trash, and personal belongings.
  • You may also qualify for a new Fannie Mae home mortgage in as little as two years after release, compared to up to seven years for those who go through foreclosure.

Next steps

  • Contact your mortgage servicer. Tell them you’re interested in a Mortgage Release and want to know if you’re eligible. Explain your current situation and reasons why this is a long-term problem. Your mortgage servicer will need to understand the reasons why you’re having difficulty in order to find the right solution for you. 
  • Choose a Mortgage Release option. Your mortgage company will help you choose the best option for your situation. These options include gracefully vacating the home, staying in the home for up to three months rent-free, or leasing the home at market rates for up to one year.

Your mortgage company wants to help you avoid foreclosure. The biggest mistake you can make is waiting to take action. Contact your mortgage company today to determine if you are eligible for a Mortgage Release.

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