Selling a House When You're Facing Foreclosure

Falling behind on a mortgage is stressful, and the letters that follow can be hard to read. Before anything else: you usually have more options and more time than the first notices suggest, and free help exists. Selling the house is one possible path. It isn't the only one, and it isn't always the best one.

Start with free help

• Call your loan servicer. Ask what options exist: repayment plans, forbearance, loan modification, or a short sale if you owe more than the house is worth.
• Talk to a HUD-approved housing counselor. Counseling is free or low-cost, and counselors can review your letters with you. Search the HUD counselor list or call the number on your lender's notice.
• Watch for scams. Be wary of anyone who asks for an upfront fee to "save" your house, asks you to sign over your deed, or tells you to stop talking to your lender.

How foreclosure works in Alabama

Most Alabama mortgages allow a non-judicial foreclosure, meaning the lender can sell the property without filing a lawsuit. Notice of the sale is published in a newspaper in the county where the property sits, once a week for three weeks, before an auction that is usually held at the county courthouse. Alabama law also gives some former owners a limited right to redeem the property after a sale. An attorney can tell you whether that applies. If you live in or near Birmingham, notices for Jefferson County properties are published in local papers and held at the courthouse.

How foreclosure works in West Virginia

Most West Virginia home loans use a deed of trust, which names a trustee who can sell the property after a default and the required notices, without a court case. Notices are published and mailed before the trustee's sale. If your home is in Kanawha or Putnam County near Charleston, the sale notice will name the trustee and the date. Contact your servicer and a counselor as soon as you see one.

How foreclosure works in Pennsylvania

Pennsylvania foreclosure is judicial. For many home loans, the lender must first send an Act 91 notice, which explains how to meet with a consumer credit counseling agency and how to apply for the Homeowners' Emergency Mortgage Assistance Program (HEMAP), run by the Pennsylvania Housing Finance Agency. If the default isn't resolved, the lender files a complaint in the county Court of Common Pleas. After a judgment, the property can be listed for sheriff sale. Several Pennsylvania counties also run foreclosure diversion or conciliation programs that bring homeowners and lenders together. Ask the court or a counselor whether your county has one. This applies across South Central PA, including Harrisburg, York and Lancaster.

When selling might make sense

Selling can be worth considering if you can't afford the house even with a modification, if there's equity you want to protect, or if the house needs repairs you can't fund. A sale before the foreclosure date can let you pay off the loan and avoid a completed foreclosure on your record. Whether it works depends on how much you owe, what the house is worth in its current condition, and how much time is left.

Comparing your selling options

1. List with an agent. If the house is in good shape and time allows, listing usually brings the most money. Ask the agent about timing against your sale date.
2. Short sale. If you owe more than the house can sell for, your lender may approve a sale for less than the payoff. These take lender approval and patience.
3. Sell directly. A buyer who purchases as-is, without a mortgage contingency, may be able to work on a shorter schedule. Expect the price to reflect repairs and risk. Get the offer in writing and have a title company or attorney handle closing.

If you'd like us to look at the house, our how it works page explains the steps. We may make an offer ourselves or connect you with a local buyer, and you're under no obligation. Read our guide to selling a House During Probate if the house is part of an estate.