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Alternatives to Foreclosure

What exactly does facing foreclosure mean?

When a homeowner fails to make his or her agreed upon mortgage loan payments, the mortgage servicer will try to avoid any additional loss by taking possession of the home, which is the collateral that had secured the loan.


Consequences of Foreclosure

You must understand that a foreclosure sale will not cover the debt your lender needs to recover, they are legally able to sue for the difference. And they often do.

Another consequence for homeowners who’ve been foreclosed on is drastically reduced credit. A foreclosure will result in a steep credit score decline, which will put you in a financial hole that may take years, if not decades, to get out of. It remains one of the most negatively impactful financial situations that homeowners can go through.

Yet, if you’re tied to a house you can no longer financially support your options may feel limited. 


Alternatives to Foreclosure

Pre-Foreclosure Sale
A pre-foreclosure sale allows you to get value out of your home to satisfy your lender. You do however, need to know the limitations before deciding if it is the best option for you. The sale must take place prior to the actual foreclosure, because you still legally own your property. Preferably the sale will satisfy your debt in full and any remaining equity will go to you.



  • Far less negative impact on your credit score
  • Ability to receive the remaining equity
  • Clean slate for future lenders or landlords


  • You are no longer in your house
  • Your credit score will take a hit, but not nearly as bad as if you are foreclosed on
  • Future ability to secure a home loan


Short Sale

A short sale happens when the property sells for less than what’s owed. You can however, work with the lender to ask them to forgive the balance. If they agree, even if you face a short sale, you won’t have a future legal battle to deal with to satisfy the remaining balance.


MRT Cash Offer Sale

Another option is working with our cash home buying service. The Mackenzie Rae Team has purchased hundreds of homes for cash. A sash offer sale allows sellers to immediately walk away from a property they are no longer interested in maintaining or can no longer afford.

Working with the MRT Cash Offer Team makes it fast and simple so you can walk away.