Loss Mitigation Options
All eight options, compared honestly
Four options are designed to keep you in the home. Four resolve the debt while protecting what you can protect on the way out. The right one depends on your income, your equity, and how much time remains before a sale.
Comparison at a glance
Timelines below are typical, not guaranteed, and assume a complete application. Where a trustee sale is already calendared, the slower options frequently become unworkable.
| Option | Outcome | Typical timeline | Documents | |
|---|---|---|---|---|
| Loan ModificationKeep the home | Stay in the home with restructured terms | Servicers generally acknowledge receipt within five business days and must notify you whether the application is complete. | 12 items | Details |
| Repayment PlanKeep the home | Cure arrears over time, loan terms unchanged | Repayment plans are the quickest option to obtain, frequently approved within one to three weeks of a documented request because full underwriting is often not required. | 5 items | Details |
| ForbearanceKeep the home | Short-term relief, with a required exit plan | Forbearance requests are often decided within one to two weeks. | 5 items | Details |
| ReinstatementKeep the home | Loan returns to current status immediately | Quotes are typically issued within three to seven business days of a written request. | 5 items | Details |
| Payoff & RefinanceKeep the home | New loan pays off the old one in full | Hard-money and bridge closings can occur in 10 to 21 days. | 7 items | Details |
| Property SaleExit | Debt satisfied in full, equity preserved | A conventional sale typically needs 45 to 75 days from listing to close. | 7 items | Details |
| Short SaleExit | Debt resolved for less than owed, with servicer consent | Short sale approval commonly takes 30 to 120 days from a complete package. | 10 items | Details |
| Deed in Lieu of ForeclosureExit | Title surrendered, foreclosure avoided | Review and closing typically takes 60 to 120 days after the marketing requirement is satisfied. | 7 items | Details |
Options that keep you in the home
These require documentable income sufficient to sustain the resolution. Retention is about affordability going forward, not only about curing the past.
Loan Modification
Permanently change your loan terms to create an affordable payment
A loan modification permanently changes one or more terms of your existing mortgage — the interest rate, the remaining term, or the treatment of arrears — so the payment becomes sustainable.…
Repayment Plan
Spread your arrears across future payments without changing the loan
A repayment plan adds a portion of your past-due balance to each regular monthly payment until the arrears are cured. Your underlying loan terms do not change, which makes this the fastest a…
Forbearance
Temporarily pause or reduce payments during a short-term hardship
Forbearance temporarily suspends or reduces your monthly payments for a defined period while you recover from a short-term hardship such as job loss, illness, or a natural disaster. Payments…
Reinstatement
Pay all past-due amounts in one payment and restore the loan
Reinstatement means paying the entire delinquency — missed principal and interest, late charges, escrow advances, and foreclosure fees and costs — in a single payment. In California you gene…
Payoff & Refinance
Replace the existing loan with new financing that clears the default
A refinance replaces your existing mortgage with a new loan that pays the current lender in full, including all arrears and foreclosure costs. It requires sufficient equity and, for most con…
Options that resolve the debt and protect your exit
When retention is not realistic, these avoid a completed foreclosure, often preserve equity or produce relocation assistance, and give you control over timing.
Property Sale
Sell before the auction, pay off the loan, and protect your equity
If your property is worth more than the total debt, selling before the trustee sale is almost always superior to letting the auction proceed. A traditional sale protects your equity, avoids …
Short Sale
Sell for less than the loan balance with servicer approval
A short sale applies when the property is worth less than the mortgage balance. The servicer and investor must approve accepting less than full payoff. It resolves the debt without a foreclo…
Deed in Lieu of Foreclosure
Voluntarily transfer title to the lender to resolve the debt
A deed in lieu of foreclosure transfers ownership voluntarily to the lender in exchange for release of the mortgage obligation. It is generally considered when the home cannot be sold and re…