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Loss Mitigation as a Foreclosure Alternative

Gavel in front of a homeIf you are preparing to move forward with foreclosure in Maryland, take the time to thoroughly investigate your loss mitigation options before continuing. Foreclosure is a losing situation for everyone involved: the bank, the loaning party, the government and the borrower. Loss mitigation can assist a borrower in negotiating an alternative to foreclosure in the state of Maryland.

Loan Modification

Loan modifications are very common types of loss mitigation in Maryland. Loan modifications change the terms of the mortgage itself so that the monthly payment is different. Many times, a loan modification involves: switching an adjustable rate mortgage to a fixed rate mortgage, lowering the interest rate or extending the length of time that the mortgage covers.

Short Sale or Short Mortgage Payoff

Short sales can occur if the mortgage currently has more value than the home itself. During a short sale, the home will be put on the market at a lender-approved price and the lender will accept less than the total amount of the mortgage.

Deed-in-Lieu of Foreclosure

If staying in the soon-to-be-foreclosed home isn’t a concern, negotiate a deed-in-lieu with the lender. In this case, debt will be totally forgiven providing that the deed to the property is given to the lender. A deed-in-lieu is not an option in Maryland if there is a second mortgage or lien on the property.

Repayment Plan

Repayment plans allow the mortgage owner to make their typical payment with an added amount every month to catch up on past payments and stop the foreclosure process.


In Maryland, forbearance is an agreement with a lender to temporarily alter or stop your mortgage payments. Some lenders may offer a “special forbearance” that reduces the payment to stop the foreclosure process. Many times, forbearance is combined with another loss mitigation option to completely avoid foreclosure instead of just stalling it.

How Can I Learn More About Loss Mitigation?

To learn about your loss mitigation options in Maryland, give us a call at Lebovitz Law. We have years of experience negotiating the best deals for our clients, whether it’s family law or property law. Contact us today. If you would like to take advantage of free resources provided by the state of Maryland, call the HOPE Hotline at 1-877-462-7555.

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