Free Homeowner Resource - Long Island & the Five Boroughs
10 Options That May Help You
Buy Time and Protect Your Future
A plain-language guide for homeowners facing mortgage hardship, foreclosure, or serious financial pressure. Written to inform - not to sell.
By Chris Valsamos - Licensed Real Estate Broker | SFR - EXIT Realty Edge
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Important Note
This guide provides general educational information for homeowners facing foreclosure, pre-foreclosure, mortgage delinquency, or related financial hardship. It is not legal, tax, or financial advice. Every homeowner's situation is different. Before making any final decision, consider speaking with an attorney, accountant, HUD-approved housing counselor, or mortgage professional. No one should charge you upfront fees for foreclosure relief services. Be cautious of anyone who makes guarantees, pressures you to act immediately, or asks you to sign paperwork you do not fully understand.
When homeowners fall behind on payments or receive foreclosure notices, many assume they only have one outcome ahead of them. In reality, there may be several options depending on your goals, timeline, equity position, and financial circumstances.
NY Foreclosure Timeline
12-24mo
from lis pendens to auction in New York
Homeowners with equity
~67%
at time of lis pendens filing
Options covered
10
from loan mod to traditional sale
Step One: The Most Important Question
Do you want to keep this home - or move on from it? That answer changes everything. If your goal is to stay in the home, options may include:
If your goal is to stay
- Loan Modification
- Forbearance Agreement
- Chapter 13 Bankruptcy
- Refinance
If your goal is to move on
- Short Sale
- Deed-in-Lieu of Foreclosure
- Traditional Sale
- Some equity-based solutions
Your family situation, job stability, monthly budget, available savings, and future plans should all be part of the decision. Not every option is right for every homeowner.
10 Options Covered in This Guide
01
Loan Modification
A loan modification is when the lender agrees to change one or more terms of your existing mortgage to make the loan more manageable. A modification is not automatic - you usually have to qualify based on hardship, income, documentation, and lender guidelines.
This may include
- Reducing the interest rate
- Extending the loan term
- Adding arrears to the back of the loan
- Converting an adjustable rate to a fixed rate
- Changing monthly payment terms
When this option may make sense
- You want to stay in the home
- You have steady income or expect it to stabilize
- You can afford a modified payment better than the current one
- You have enough time to submit documents and go through lender review
Things to watch out for
- Verbal promises not confirmed in writing
- Confusion between a trial modification and a permanent one
- Believing the foreclosure process has stopped without written confirmation
- Missed deadlines or missing paperwork
Practical guidance
Keep records of every communication, confirm everything in writing, and ask clear questions about deadlines, trial terms, and what happens if documents are missing or incomplete.
02
Forbearance Agreement
A forbearance agreement is a temporary arrangement with the lender that may pause, reduce, or restructure payments for a period of time. In other cases, it may allow you to cure arrears over a set schedule while making current payments.
When this option may make sense
- Your hardship is temporary
- You expect income to improve
- You can realistically afford the catch-up arrangement
- The lender is willing to work with you on a structured timeline
Risks
- Forbearance plans can fail if the payment schedule is too aggressive
- Many homeowners agree to terms that look manageable on paper but become difficult after one or two months
Practical guidance
Before agreeing, make sure you understand: the exact monthly payment due, when the first payment is due, whether foreclosure activity is merely postponed or fully paused, what happens if even one payment is late, and whether the agreement is confirmed in writing.
03
Equity Partnership or Other Equity-Based Solution
Some homeowners still have meaningful equity in their property but need help solving a default, making repairs, or creating a strategy to sell later. An equity-based solution may involve a structured arrangement where outside capital helps cure arrears, fund repairs, or support a sale strategy in exchange for a clearly defined share of proceeds.
When this option may make sense
- The property has real equity
- The homeowner cannot solve the problem alone
- The homeowner is open to moving or restructuring ownership
- All terms are transparent and in writing
Risks
- Any arrangement involving title, equity, proceeds, or third-party ownership must be reviewed carefully
- Never sign over rights or title without fully understanding the terms - ideally with legal review
Practical guidance
Ask: Who controls the property during the process? Who pays arrears, repairs, taxes, and carrying costs? How is profit or equity divided? What happens if the property does not sell quickly? What documents are being signed and what rights are being transferred?
04
Subject-To or Third-Party Takeover Structure
A subject-to arrangement generally means a buyer or third party takes ownership or control of a property while the existing mortgage remains in place. This type of structure is complex and carries legal, financial, and credit implications. Even if someone else agrees to make payments, the original borrower may still remain responsible for the mortgage.
Major caution
- Understand whether title is transferring and whether the mortgage stays in your name
- Understand what happens if the third party stops paying
- Never enter without written proof of who must make payments and how you are protected
- Have an attorney review the paperwork
Practical guidance
This is an advanced strategy and should be approached with extreme care. It can solve certain problems, but it can also create new ones if not structured properly.
05
Short Sale
A short sale happens when the lender agrees to allow the home to be sold for less than the total amount owed on the mortgage. This option is often considered when the homeowner owes close to, or more than, the property's current market value and cannot continue making payments.
When this option may make sense
- The home is worth less than what is owed, or close to it
- The homeowner has hardship
- Keeping the property is no longer realistic
- There is enough time to market the home and negotiate with the lender
Potential benefits
- May avoid a completed foreclosure
- May reduce long-term financial damage compared with foreclosure
- May allow for an orderly transition out of the property
- May create a cleaner path forward than simply doing nothing
Challenges
- Short sales involve documentation, hardship review, lender approval, lien negotiations, timing issues, and constant follow-up
- Not every lender handles them the same way
Practical guidance
A short sale is not just about finding a buyer. It is also about building a complete case for lender approval, handling the timeline, and making sure the homeowner understands the consequences and possible outcomes.
06
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a court-supervised reorganization of debt. In some cases, it may allow a homeowner to stop foreclosure temporarily and repay arrears over time through a court-approved plan.
When this option may make sense
- You want to keep the home
- You have income to support a repayment plan
- You need court protection to stop immediate foreclosure action
- An attorney advises that this is a viable strategy
Important
- This is a legal process - only a qualified bankruptcy attorney can advise whether Chapter 13 is appropriate for your specific situation
- Timing matters. A delay of even a few days can affect your options
Practical guidance
If foreclosure is imminent and you are considering bankruptcy, speak with a qualified attorney immediately. For some homeowners, Chapter 13 is a valuable way to buy time and create structure. For others, it may not be the right fit.
07
Deed-in-Lieu of Foreclosure
A deed-in-lieu of foreclosure is when the homeowner voluntarily transfers ownership of the property back to the lender instead of going through the full foreclosure process.
When this option may make sense
- The lender is willing to accept it
- There are no better alternatives available
- The homeowner is ready to surrender the property
- Title issues, liens, or occupancy conditions do not prevent acceptance
Things to consider
- A deed-in-lieu may sound simpler than foreclosure but carries possible credit, tax, and deficiency implications
- In some situations, lenders may report losses differently and tax consequences may exist
Practical guidance
Before agreeing, ask for written confirmation of: whether the debt is fully forgiven, whether any deficiency may remain, whether there may be tax consequences, and how the lender will report the outcome.
08
Selling the Home Through a Traditional Real Estate Sale
Sometimes the best answer is the most straightforward one: sell the home on the open market. This makes the most sense when there is enough equity to cover what is owed and closing costs, or there is enough time and lender cooperation to support a sale process.
When this option may make sense
- The property can be priced competitively
- There is enough time before any sale deadline
- The homeowner is ready to move
- There is a realistic path to getting the transaction closed in time
Important reality
- A traditional sale can be difficult if the timeline is extremely tight or if the home must be sold below market value to close fast
Practical guidance
Ask for a clear net sheet, realistic timing estimates, and a candid discussion about whether the market can support the plan. A traditional sale can preserve more value than foreclosure if there is enough time and cooperation.
09
Refinance
A refinance replaces your existing mortgage with a new loan, ideally on better terms or in a way that resolves the arrears.
When this option may make sense
- You still qualify based on credit, income, equity, and underwriting standards
- Your delinquency is limited or your financial profile is strong enough
- There is sufficient value in the property to support a new loan
Common challenge
- Many homeowners in deep default assume refinance is still available when qualification may be very difficult if credit has dropped, arrears are significant, or loan-to-value ratios are too high
Practical guidance
Before spending money or time chasing a refinance, get a realistic assessment of: your current credit position, how many payments are behind, estimated property value, loan-to-value ratio, and fees, rates, and approval likelihood.
10
Do Nothing and Allow Foreclosure to Proceed
Some homeowners, whether by choice or by circumstance, do not pursue a workout, sale, or legal strategy and instead allow foreclosure to continue. This usually happens when homeowners feel overwhelmed, believe it is too late, or do not know what to do.
Reality check
- Doing nothing is still a decision, and it usually has consequences
- Loss of the home, credit damage, possible deficiency issues, tax questions, and a more stressful transition later are all possible outcomes
Practical guidance
Even if keeping the home is not realistic, it is often better to make an intentional decision rather than simply let events unfold without a plan. The nine options above all exist to create a better outcome than this one.
Not every option is right for every homeowner. Some are designed to help you stay in the home. Others are designed to help you exit the property with less damage. The best path depends on your income, equity, hardship, lender, and how much time remains.
- Chris Valsamos, Licensed Real Estate Broker | SFR
Consumer Protection - Important Warnings
If you are in financial distress, you may be contacted by investors, agents, attorneys, consultants, modification companies, and others offering help. Some may be legitimate. Some may not. Be cautious if anyone:
- Asks for upfront money before services are performed
- Guarantees they can stop foreclosure
- Pressures you to act immediately without time to think
- Asks you to sign paperwork you do not fully understand
- Asks you to make mortgage payments to them instead of your lender
- Asks you to transfer the title or deed to them
Free Resources for New York Homeowners
If you need guidance and are not ready to speak with a broker, these New York-specific resources provide free, impartial help:
- NY Homeowner Protection Program (HOPP) - free housing counselors and legal services statewide. Call (855) 466-3456 or visit homeownerhelpny.com
- HOPE NOW 24-hour Hotline - free assistance from HUD-approved counseling agents. Call (888) 995-4673
- NY DFS Consumer Hotline - report foreclosure harassment or fraud. Call (800) 342-3736
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