If you were to be in danger of losing your home due to debt in Ohio, there might be a number of options available to either reduce your debt or to hold onto your property. The alternatives include:
- Foreclosure on your mortgage
- Short sale of your home
- Legal defense against foreclosure
As you have probably surmised, some of these options are typically more desirable than others. Please continue reading for a brief explanation of all three.
Foreclosure is the process through which a bank is able to cancel your debts and reclaim the collateral— in this case, your home. Foreclosure does have the potential to reduce your debt considerably, but the loss of a home combined with the potential for damage to your credit score probably makes this the least attractive option.
Short sales hold multiple benefits for you, at least when compared to foreclosures. For one thing, you would probably be able to reside in your home until the transaction was completed. Another benefit is that your debt would be forgiven— per the terms of your agreement with your lender— without a foreclosure judgement.
Another option you might consider in certain circumstances is attempting to defend against foreclosure. Even if you do not believe that your defense would be successful, taking legal action might, in some cases, delay certain aspects of foreclosure, such as sheriff’s sales.
The Ohio Department of Commerce Home Buyer’s Guide offers a more in-depth look at foreclosure and short sale, along with what you might expect while selling your home. Foreclosure defense strategies vary widely, and often require a variety of approaches. Please do not think of this article as legal advice: It is only intended to educate on the subject.