Options To Leave Your Home

Avoid Foreclosure

Homeowners who are struggling with their mortgage payments are facing tough choices—do you stay in a home you may no longer be able to afford or should you try to leave? While it may be difficult to think about leaving your home and making this decision, it may be the best option if other solutions to keep you in your home are no longer viable.

Don’t just walk away from your home.
There may be better options. The most important thing is to avoid foreclosure—and options may be available to assist you if you're ready to leave your home. Some options may even offer cash incentives to help you move and transition into different housing. Now’s the time to take action before it’s too late.
How to Avoid Foreclosure

Here’s an overview of possible options when you can no longer stay in your home but want to avoid foreclosure:

Selling your home is an option if you have a financial hardship and can no longer afford it. If your home is worth more than the amount you owe on your mortgage and other debts secured by the home, the difference is known as home equity. A sale with equity lets you convert this portion of your home’s value into cash that’s yours to keep or use for other purposes when you sell your home.

  • Pay off your remaining mortgage debt
  • Benefit from the equity in your home by keeping your share of the proceeds from its sale
  • Use your proceeds for new housing, other expenses, or savings
  • Avoid the damage to your credit caused by a foreclosure
  • Have more flexibility and control over exiting your home

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A short sale is the sale of your home for less than the balance remaining on your mortgage. If your mortgage servicer agrees to a short sale, you can 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, but once the short sale is complete, you’ll be relieved of your responsibility to pay any remaining balance—called a “deficiency waiver.”

  • Eliminate your remaining mortgage debt
  • Relocation assistance may be available — up to $3,000
  • Start repairing your credit sooner than if you went through a foreclosure
  • May be able to get another Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

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With a Mortgage Release (Deed-in-Lieu of Foreclosure), you transfer the ownership of your property to the owner of your mortgage in exchange for a release from your loan and payments.

  • Eliminate your mortgage debt
  • May be eligible for up to $3,000 in relocation assistance
  • Start repairing your credit sooner than if you went through a foreclosure
  • May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)
  • Have flexibility and control over exiting your home—choose to vacate immediately, stay for up to three months (without paying rent), or lease the home for up to one year

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A foreclosure is the legal process where your mortgage company obtains ownership of your home (i.e., repossess the property). A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan.

  • Eviction from your home—you’ll lose your home and any equity that you may have established
  • Stress and uncertainty of not knowing exactly when you will have to leave your home
  • Damage to your credit—impacting your ability to get new housing, credit, and maybe even potential employment, for many years
  • May owe a deficiency balance after the foreclosure sale
  • Lose any relocation assistance or leasing opportunities that may be available with other options
  • Forfeit ability to get a Fannie Mae mortgage to purchase another home for up to 7 years (Fannie Mae guidelines)

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