​If you've fallen on hard times and are behind on your mortgage payments, don't panic just yet. There are several options you can choose from before being facing foreclosure. Here are some common alternatives.

Consider modifying your mortgage

Most mortgage companies give you the option of mortgage modification if you're behind on your payments or facing long-term hardship. When you choose this alternative, you reach an agreement between you and your mortgage company to change the terms of your mortgage. This could mean adjustments in the payment amount, the length of the loan, the interest rate and more.

Bring up the prospect of a repayment plan to your bank

If you suspect that you will only have short-term financial issues, a repayment plan might be in your best interest. Talk to your bank and work out a plan that will give you the opportunity to catch up with your mortgage without going over your budget. Keep in mind that solidifying a plan with your bank is less damaging to your credit score than many other options - especially foreclosure.

Request a mortgage forbearance agreement

If you can't afford your mortgage payments at all due to unforeseen circumstances (like a government shutdown), you may be granted temporary relief through a forbearance. In essence, your payments are temporarily halted for a few months until you can get back on your feet. These payments will be added to the end of your mortgage agreement, so you'll still have to eventually pay them - but a forbearance agreement gives you some breathing room.

Ask your bank about the short-sale process

If you know you won't be able to keep your home, a short sale is a viable option. The short-sale process occurs when a homeowner sells their home to a third party for its current market value for less than what they owe. In order for a short sale to be granted, your mortgage holder or lender has to agree to accept the earnings from the sale in exchange for giving up the lien on the property. It's important you make sure that any agreement you make in this process relieves you of responsibility for the remainder of your debt. If this isn't agreed upon, you could make your financial situation much worse.

Offer to make a “deed in lieu” foreclosure transaction

Another option to avoid foreclosure is the deed in lieu foreclosure process. In this process, the end goal is to be relieved from your mortgage obligation by releasing your title to the property. You must apply to be approved for this process through your lender, providing documents like your proof of income, tax returns, financial statements, and other documents. A real estate attorney can give you valuable insight as to how to maximize your chances of being approved.

Contact a New York Real Estate Attorney

At the Law Offices of Melvin Monachan, we've helped numerous people tied up in complex real estate disputes overcome issues with our expertise and knowledge. Let us help you find a solution to your real estate issues. Contact us online or give us a call at (516) 714-5763.