Foreclosure Is Not the Only Exit: Financial Options for Homeowners Falling Behind
HOUSING - What if you were to miss one payment on your mortgage? Would you lose your home?
There are still options available to you, such as payment assistance, selling your home or getting approved by your lender to walk away from your property.
This also comes into play if you have tenants renting from you.
What you’ll learn:
- Work Out What the Property Is Costing You
- You Can Sell Rental Property With Tenants
- Ask Your Servicer About Keeping the Property
- Compare the Ways to Sell Before Foreclosure
- When the Sale Won't Cover the Mortgage
- Decide What Needs to Happen Next
Work Out What the Property Is Costing You
How much do you currently owe and how much are you able to pay? These two numbers will determine what steps you need to take.
Talk to your mortgage servicer to see how much you are behind, what charges you may have accrued and when your next payment is due. Now take your current income and list your mortgage, property taxes, insurance and any other necessities you will need to pay. If the gap is temporary, a repayment arrangement might help. If it keeps growing, keeping the property may be harder to justify.
If your house is rented, use how much your tenants are paying per month. Make sure to account for any repairs that may need to be done or vacancy. Just because your house is being paid off by a tenant does not mean you aren't dipping into your savings. Think about your upcoming months, if there are repairs or a chance of missing rent your payment could become unaffordable.
How much would you receive if you were to sell your house? Subtract your mortgage, other liens and closing costs. This will give you an idea on what you can expect.
Make sure to read any letters from your lender. You may have a set date that your home is being sold.
You Can Sell Rental Property With Tenants
Can you sell your house if there are tenants inside? Yes, you don't always have to wait until your tenants lease is up. There are many buyers that are looking for properties with current income.
When you sell your home the tenant is still considered a tenant. According to the City of Wichita Housing when a rental home is sold, the tenant still has the right to stay. In Wichita, the landlord must provide the tenant with written notice of the property's sale.
For Wichita owners considering an as-is sale, searching for ‘we buy houses Wichita’ is one way to explore a direct cash offer alongside a traditional listing. The useful question isn't simply how fast a buyer can close. It's whether the offer works with the existing tenancy and your financial deadline.
Collect any documents you may have on hand before listing your property.
- Copies of lease, payments made and lease terms
- Security deposit and any repairs that haven't been completed
- Utility payments and when rent is due
Let your tenants know what to expect when your house is listed. Letting them know of any changes can help avoid problems down the road.
Never tell your tenant that they will be moving out. In Kansas, a landlord showing a rented home to prospective buyers must give reasonable notice and enter at reasonable times.
Ask Your Servicer About Keeping the Property
If you want to keep your home there are options available through your servicer. After losing income or falling on hard times, they can assist you.
According to the Federal Housing Finance Agency 48,439 foreclosure-prevention actions were performed by Fannie Mae and Freddie Mac during Q2 of 2026. This only applies to their portfolio of homes.
Some options that may be available to you are:
- Repayment Plan: Allows you to add the amount you are behind to your monthly payment. If you regain income, this may be an option for you. Just keep in mind that your payment will be higher.
- Forbearance: Your payments are decreased or stopped for a certain amount of time. Make sure you qualify and know what happens to the amount you didn't pay.
- Loan Modification: You can apply to modify your loan. Depending on your mortgage this may be available to you.
Depending on your situation, refinancing may also be an option. But with payments missed you may not be able to qualify or can't afford the closing costs.
Are you living on the property or is it a rental? Knowing this can help determine what options you may have. Some assistance programs only allow for primary residences. Always make sure you understand the terms of any help you accept. Know when your payments will resume, if your arrears will be added to your loan or if you will need to pay that amount in full. Just because your payment will be lower does not mean you're not going to suffer later on.
Compare the Ways to Sell Before Foreclosure
If you can't bring your payments up to date, you may want to look into selling your home. Selling your home before foreclosure can help you pay off your mortgage and not have to go through the foreclosure process. Just because a company offers you the most money does not mean it will benefit you in the long run.
A traditional listing may take longer while the home is prepared, shown and the buyer's financing is arranged. You will need to prepare your home, show it to buyers and hope that they can get a loan approved. During this time you are still paying for your property.
Selling your home As-Is may not require you to make any repairs (depends on company). You may not receive as much as you would with a traditional listing. Always know what your closing costs are and when the company is able to close. They may need to inspect your home, qualify for a loan or have you remove your belongings from the property.
If you have tenants in the home, ask who will handle the lease, security deposit and rent at closing. Make sure your closing agent explains everything to you.
Just because you have a purchase agreement does not mean your foreclosure has been halted. If your home is scheduled to be sold, contact your servicer and speak to an attorney in your area.
When the Sale Won't Cover the Mortgage
If you know the sale won't cover your mortgage payoff, other options may still be available, but a standard sale may not work without your lender's consent.
A short sale allows you to sell your home for less than what you owe on your mortgage. You will need your lenders permission to do this and ask if they will pursue the amount you didn't pay. Have them give you that in writing.
Deed in Lieu of Foreclosure allows you to give your home back to your lender. There are some situations where you may not qualify to do this.
These options can affect your credit and you may owe taxes on the sale of your home. Speak to someone that can help you understand your options. Don't assume that these options will not hurt you.
Decide What Needs to Happen Next
Now that you know what your issue is, you can begin to figure out what your next step will be.
If your income has increased, work on catching up on your payments. If your income is still low you may want to look into modifying your loan or selling. If you owe more than your home is worth, talk to your lender about your options.
Always have copies of your letters, offers and contracts. If you receive any foreclosure letters or your home is scheduled to be sold, speak to an attorney. You can also speak to a HUD approved counselor for more information. They usually do not charge you.
Be wary of anyone who guarantees a rescue, asks for upfront fees for foreclosure help or tells you to stop speaking with your mortgage servicer.
One Last Thing
Your home does not have to end up in foreclosure. There are many options that can help you avoid this. Just know what they will cost you.
Stay informed of what you need to do and when.
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