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Workout options


The following are typical workout options provided to a borrower by mortgage lenders when the borrower is near or in foreclosure. The Wyoming Foreclosure Hotline counselor can help a borrower explore which option is the most appropriate to the situation and then assist with submission of an application to the mortgage lender for review. The mortgage lender will make the decision as to whether a borrower qualifies for any and all workout options.


Short-term Repayment Plan

A mortgage company may negotiate a short-term repayment plan by asking the borrower to begin paying the full payment due plus a partial payment to get the loan caught up.


Forbearance Agreements

Forbearance agreements allow the borrower to catch-up on the mortgage payments over a longer period of several months.  With forbearance agreements, you may be able to postpone payments for a period of time, depending on circumstances.



Refinancing occurs when a borrower applies to re-write the mortgage loan through the current mortgage company or through another program. This process may lower the interest rate, establish a fixed rate, lower the monthly payment, or provide a combination of those outcomes. The purpose of refinancing is to make the mortgage payments more affordable and to prevent future default.



A modification changes one or more of the original terms of the loan, such as the interest rate, payment amount, maturity date, or the amount of the unpaid principal balance. A modification can cure the default by adding the delinquent amount to the end of the loan or reducing the monthly payment, whichever is more affordable for the borrower.


Partial or Advance Claim

Qualified FHA borrowers may be eligible to obtain an interest-free loan, also called a partial claim, to bring mortgage current. The borrower initiations a promissory note and a lien is placed on the property until the note is paid in full.


Selling the Property

If the borrower has sufficient equity, the best option may be to sell the property before foreclosure and net enough from the sale to pay the remaining balance on the loan.



Some mortgages can be assumed (taken over) by a third party. When a mortgage is assumable, the property can be transferred with the new owner taking over the payments. If payments were behind when the mortgage was assumed, without a workout agreement, the person assuming the mortgage will be in default and subject to foreclosure. The advantage may be that the assuming party is in a better position to deal with the default.


Short Sale

Short sales must be negotiated with the mortgage company to sell the property for less than the amount necessary to pay the loan. In doing so, the mortgage servicer agrees to accept the proceeds of the sale (or some other agreed upon amount) to be applied toward the debt.


Deed-in-Lieu of Foreclosure

A deed-in-lieu of foreclosure is a borrower’s voluntary conveyance of the title to the mortgage servicer in exchange for discharge of the debt. In accepting the deed, the mortgage servicer is also accepting responsibility for all liens against the property including judgments, junior liens, lease obligations, etc.



Brothers Redevelopment, a 501(c)3 HUD-approved housing counseling agency, was awarded the bid to implement, manage, and administer the Wyoming Foreclosure Hotline. The hotline’s HUD-approved housing counseling agencies are networked by the toll-free number 855-996-2256. To learn more email