Your options, compared honestly
Falling behind on a mortgage is stressful, and it’s easy to assume the only choices are losing the house or selling it fast. There are usually more. This guide compares the main paths, including the ones that don’t involve us. It’s general information, part of our page on being behind on payments. A HUD-approved housing counselor (free) or an attorney can help you choose.
Path 1: Work it out with your lender
What it looks like: You contact your lender’s loss mitigation department and apply for help.
- Loan modification: Changes the loan terms to make payments affordable
- Forbearance: Temporarily pauses or reduces payments
- Repayment plan: Spreads missed payments over time
- Reinstatement: Catching up in one payment
Good fit when: The hardship is temporary and you want to keep the house.
Minnesota law generally limits lenders from moving ahead with a foreclosure sale while a complete loss mitigation application is pending. Apply early and keep copies of everything.
Path 2: List the house
What it looks like: You hire an agent and sell on the open market.
Good fit when: There’s enough time before the sale date for a listing to close, the house is in good shape, and you want the highest price.
Watch for: Months of showings and a buyer’s financing timeline. If the sale date arrives first, you may lose the chance.
Path 3: Sell for cash
What it looks like: A cash buyer purchases as-is and closes quickly. With us, you get a range within 24 hours and a written offer after the walkthrough.
Good fit when: The deadline is close, the house needs work, and you have equity to protect.
Watch for: A cash offer is lower than retail. Anyone promising to “stop your foreclosure” should be a red flag.
Path 4: Short sale or deed in lieu
What it looks like: If you owe more than the house is worth, the lender may accept less than the full payoff (short sale) or take the deed back (deed in lieu).
Good fit when: There’s no equity and keeping the house isn’t possible.
Watch for: Lender approval takes time, and there can be tax and credit consequences. Get advice.
Side by side
| Lender options | Listing | Cash sale | Short sale / deed in lieu | |
|---|---|---|---|---|
| Keep the house? | Possibly | No | No | No |
| Time needed | Varies | Months | Weeks | Months |
| Protects equity | Yes, if it works | Yes | Yes | Usually no equity |
| Repairs needed | No | Often | No | Varies |
| Lender approval | Yes | No (payoff at closing) | No (payoff at closing) | Yes |
Compare the numbers
If selling is on the table, compare a listing estimate with a written cash offer. See cash offer vs. listing in Minnesota.
Questions to ask your lender
When you call, have your loan number ready and ask:
- What loss mitigation options do you offer?
- What documents do you need for a complete application?
- Will foreclosure steps pause while my application is reviewed?
- What is my reinstatement amount today, and how long is it good for?
- Who is my point of contact, and how do I reach them?
Write down names, dates, and what was said. Send documents in a way you can track.
Red flags when you’re behind
People in financial trouble are targets for scams. Watch out for:
- Anyone who asks for an up-front fee to “save your home”
- Promises to stop a foreclosure, guaranteed
- Pressure to sign over your deed
- Advice to stop talking to your lender or a housing counselor
- Offers to “rent back” your home after you sign it away, without clear written terms
A HUD-approved housing counselor can review any offer you’re unsure about, for free.
What happens to your equity in each path
| Path | What typically happens to equity |
|---|---|
| Modification or reinstatement | You keep the house and its equity |
| Listing | You receive what’s left after the payoff and selling costs |
| Cash sale | You receive what’s left after the payoff |
| Sheriff’s sale | Excess proceeds, if any, go through a legal process; equity is often reduced |
| Short sale or deed in lieu | Usually no equity to protect |
When time is very short
If the sheriff’s sale is only days or a couple of weeks away, call an attorney immediately. Some options, like postponement, have strict timing. A cash sale can move quickly, but no one can guarantee it closes before a sale date. Our guide to Minnesota foreclosure by advertisement and the redemption period walks through each deadline.
Get free help now
A HUD-approved housing counselor or the Minnesota Homeownership Center can help with any of these paths, at no cost. The earlier you call, the more options you have.
Minnesold's team includes a licensed Minnesota real estate agent. Information on this site is general and educational. It is not legal, tax, or Medical Assistance advice. Talk with a probate attorney, elder law attorney, or CPA about your situation.