Maybe you’re a month or two behind on your mortgage, or more. Maybe the letters from your lender are piling up and you’re not sure what to do next. First, take a breath. You’re not the only one, and you probably have more choices than you think.
I’m Lonnie McInnis. I’ve been helping homeowners here in Northeast Ohio since 2020, and I work on my own, so when you call, you talk to me. My specialty is short sales. I’m not a real estate agent, a lender, or a lawyer. But I talk with homeowners in this spot all the time, and I want to explain your options in plain English, including the ones that have nothing to do with me.
I’m Behind on My Mortgage. What Can I Do?
The most important step is simple: don’t ignore it. Mortgage problems usually get harder the longer they sit. Here’s where I’d start:
- Call your lender (also called your loan servicer). The phone number is on your monthly statement. Ask what help they offer. Common options include:
- A repayment plan: you catch up by paying a little extra each month for a while.
- Forbearance: your payments are paused or lowered for a short time. This isn’t forgiveness. You’ll still owe that money later.
- A loan modification: the lender changes the terms of your loan to make your payment more manageable.
- Talk to a free housing counselor. HUD-approved housing counselors give free help to homeowners who are behind. They can help you understand your options and talk with your lender. Call (800) 569-4287 to find one near you.
- Keep notes. Save every letter, and write down who you talked to and when.
You may have heard of Ohio’s “Save the Dream” program. Its mortgage help stopped taking applications in 2023. A housing counselor can tell you about any programs that are available right now.
Can I Sell My House If I’m Behind on Payments?
Yes, in many cases you can. Being behind on payments doesn’t take away your right to sell your home. Until a foreclosure sale is final, the house is still yours.
When you sell, the money from the sale pays off your mortgage first, including the payments you missed and any fees. What’s left over goes to you.
So the big question is: how much is your house worth compared to what you owe?
- If your home is worth more than you owe, you have what’s called equity. A regular sale with a real estate agent may be your best choice, because it can get you the highest price. I’ll tell you that honestly if it’s true for you.
- If you want a quicker, simpler sale, or the house needs a lot of repairs, selling directly to an investor may be an option. Just know that an investor’s offer is usually below what a fully fixed-up house might sell for on the open market.
- If you owe more than the house is worth, keep reading. That’s where a short sale comes in.
What If I Owe More Than My House Is Worth?
This is called being “underwater,” and it happens more than people think.
A short sale is when you sell your home for less than what you owe, and your lender agrees to accept that lower amount. It’s called “short” because the sale price falls short of the loan balance.
Here’s how it usually works:
- The home gets an offer from a buyer.
- You send the lender information about your situation, often called a hardship, like a job loss, illness, divorce, or a death in the family.
- The lender reviews the offer and the paperwork, and then decides whether to approve the sale.
A few honest things to know:
- The lender makes the decision. No one can promise a short sale will be approved.
- You may or may not owe the rest. Some lenders forgive the remaining balance, and some don’t. Get the terms in writing before you agree to anything.
- Forgiven debt can affect your taxes. It’s smart to ask a tax professional.
- It will likely show up on your credit. Many people find it less damaging than a completed foreclosure, but every situation is different.
- It takes time. Lender reviews can take weeks or longer.
When I’m the buyer in a short sale, I handle the lender paperwork and keep you updated.
How Long Do I Have? Why It Helps to Talk Sooner
Here’s the general picture in Ohio:
- Before foreclosure is filed: Under federal rules, most lenders can’t start the foreclosure process until you’re more than 120 days behind. This is the best time to look at your options.
- Ohio foreclosures go through the courts. To foreclose, your lender has to file a case in court. If you’re served with foreclosure papers, you generally have 28 days to file a written answer with the court. Don’t miss that deadline, even if you’re talking with your lender.
- The court process takes time. It can take anywhere from about six months to more than a year, depending on the case. If the court rules for the lender, the home can be sold at a sheriff’s sale.
Every case is different, and I can’t give legal advice. If you’ve received court papers, please talk with an attorney. If you can’t afford one, your local legal aid office may be able to help.
The main point: the sooner you start, the more options you usually have. Waiting can shrink your choices.
What Are My Other Options?
Here’s a quick recap:
- Work it out with your lender: a repayment plan, forbearance, or loan modification, if you want to keep the home and can afford a payment going forward.
- Get free help from a housing counselor: call (800) 569-4287.
- Sell with a real estate agent: often the best choice if you have equity and enough time.
- Do a short sale: if you owe more than the home is worth and your lender agrees.
- Work with an investor like me: depending on your situation, I may be able to help with a short sale, work with lienholders, make a straightforward cash offer, or look at other options like subject-to or a lease option. Each one has pros, cons, and risks. I’ll explain them clearly, and I always suggest having an attorney review any agreement before you sign.
One more thing: be careful of anyone who asks for money up front to “save your home,” or who pressures you to sign over your deed. Never sign anything you don’t fully understand.
Let’s Talk About Your Options
You don’t have to figure this out alone. If you’re behind on your mortgage in Cleveland or anywhere in Northeast Ohio, I’m happy to listen and walk you through your choices. There’s no cost to talk and no obligation to do anything.
Call or text me at (216) 238-3211, or fill out the short form at mcinnispropertysolutions.com.
McInnis Property Solutions is a brand name used by McInnis Realty and Investments. I’m not a lender, law firm, licensed real estate broker, or government agency. Lenders decide whether to approve a short sale. This article is general information, not legal or financial advice.