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How To Avoid Foreclosure On Your Home Post-Covid

Miss just four mortgage payments, and the foreclosure process can commence.

However, it doesn’t take more than just one missed payment, for home loan borrowers know that all is not good with their cash flow and finances. When you avoid taking positive action to turn your cash flow positive, you’re no longer in control of what may come next.

Lenders do have the law on their side, insofar as they can take your home and sell it to recover what they are owed – i.e. the balance of the mortgage. What’s more, this is not the best outcome for financially distressed homeowners. Why? Well, the lender has no interest in selling your home for the best price.

If you sell your home, you will be doing all you can to present it favorably to prospective homebuyers to get market value or more for it. Selling your home when you’d prefer to keep it and continue to reside in the house is usually the last option a homeowner will take after they’ve exhausted all other alternative solutions to keeping the home loan repayments occurring on time.

However, reluctance to take the necessary action to get your home sold and your debt repaid will result in the lender selling your home quickly and probably to the first buyer. Plus, when homes are sold in foreclosure proceedings, the property is listed as a mortgagee sale, and homebuyers know to offer less than its market value.

With the foreclosure sale funds, the lender will recover the debt and after costs associated with the sale, including:

If there is any money left over after all expenses associated with the foreclosure, it will be passed onto the homeowner. However, the funds from the home sale will be far less than if the home was sold by the homeowner ‘before’ foreclosure proceedings.

Let’s look at what’s put a lot of homeowners into financial hardship and the impact of foreclosure.



Financial stress and lack of job security due to Covid-19 and other economic impacts are a new normal for many homeowners.

When the Covid-19 Pandemic hit in 2020, the world came to a screeching halt, and jobs, financial stability, and prospects were unanimously put in jeopardy.

While economic hardship affecting housing, finances, and job loss peaked in December of 2020, the aftermath of the pandemic is still felt throughout the United States as many families continue to struggle with finding their footing for financial wellbeing.

There was temporary relief with the CARES Act, including moratoriums on eviction for renters and foreclosure for homeowners. Still, the threat of losing one’s home looms as the world adjusts to post-pandemic norms and financial institutions move forward with monthly mortgage payments and the consequences of non-payment. According to, the top reasons for foreclosure include the following:

  • Job loss
  • Reduction in income
  • Accumulating debt
  • Medical bills
  • Unexpected large personal expenses
  • Moving without the successful sale of the home
  • Natural disasters affecting living situations, jobs, and finances

The long-term impacts of housing insecurity are often devastating for those living through it. People who experience housing insecurity are more likely than others to become homeless or be unemployed. When foreclosure is the cause for this insecurity, there are ways to mitigate risk and avoid the ultimate loss of property, equity, personal possessions, and a place to live.

What is Foreclosure?

Foreclosure is the legal process of seizing property used as collateral for loan repayment. It can happen to any property, but it most often happens with residential properties.

When multiple payments are missed in a row or the deadline for catching up on overdue payments is exceeded, the foreclosure process may begin and ultimately lose a home. In addition, it can damage a homeowner’s credit rating.


Foreclosure often begins with missed payments—typically for at least three months in a row—and the lender responds with an alert of default and steps the homeowner can take to catch up on their payments.

Once the number of months determined in the mortgage terms goes by without full, consistent payment, a public foreclosure notice is posted with the clerk for the county of residence. This establishes the official foreclosure process and is the lender’s declaration of intention to sell the property.

The process to foreclose on a home can take as few as four months and as many as nine or more. During this time, the homeowner may seek legal representation to slow or stop the foreclosure in a court of law. If the foreclosure proceeds, the home is auctioned, and the lender receives the proceeds. When the bank takes possession of the house, the homeowner faces eviction and must leave the property behind, losing the equity and possibly personal possessions.

Avoiding Foreclosure

When homeowners reach the foreclosure stage of their financial woes, giving up their home is often seen as the easiest or only path forward. While the options can feel limited, foreclosure is not the best strategy in most cases, and homeowners may have opportunities to move forward without the strike to their credit that losing a home brings and with a brighter future ahead.

Avoiding foreclosure looks different for each homeowner as the circumstances of their mortgage delinquency differ. Taking steps to prevent foreclosure begins with preparation, but when preparing for the worst isn’t enough, there are still options to avoid losing your home.

Preparing for the possibility of mortgage delinquency begins with managing household expenses and saving an emergency reserve. Understanding the options available to resolve mortgage delinquency before the mortgage payments are behind allows homeowners to be prepared for an objective, solutions-based discussion with lenders should financial concerns arise.

Mortgage delinquencies can be challenging to avoid, but homeowners can reduce the risk by taking advantage of programs tailored to their situation and overseen by their mortgage lender. There are government programs as well and loan modification options available to help homeowners avoid foreclosure.

Selling Your Home

As mentioned early on, taking the initiative to sell your home to pay off the mortgage is a better outcome for you and your family than allowing the lender to take control and sell your home under the foreclosure process.

In EIN Press wire, since 2020, Ohana Home Solutions has extended their pre-foreclosure home buying service to Idaho, Colorado and Arizona, and operates in Ohio, Hawaii, New Jersey, Utah and Georgia. They say it’s vital homeowners know they can take control and sell before losing their homes to forced sales and less profit.

Homeowners also have opportunities to sell to other types of homebuyers, including property investors and cashed-up owner-occupier homebuyers.

Take control of your financial wellbeing by finding ways to keep the cash flow positive.  Cut down on discretionary spending, and see ways to earn more income.  Should you find yourself without the funds to meet a mortgage payment, find solutions and communicate with your lender before it’s too late.


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