Legal Corner: What are your options to avoid foreclosure?

LAKE CHARLES, La. (KPLC) - Legal Corner answers viewers’ civil legal questions.

QUESTION: I am considering a provisional custody by mandate regarding my son, but I am not sure if I fully understand what it is and if it is the right thing to do for my situation.

Please explain what it is and how it works.

ANSWER: Provisional custody by mandate is a legal option in Louisiana that allows a parent or legal guardian to temporarily give another adult, such as a relative, friend, or caregiver, the authority to care for their child without going to court. This is done through a written document, known as a mandate, which must be signed and notarized. The person receiving custody can then make certain decisions for the child, such as enrolling him in school, taking him to medical appointments, and handling everyday caregiving tasks.

This arrangement is meant to be temporary and can last for up to one year, although it can be renewed. It is often used when a parent is unable to care for their child for a limited time. Notably, the parent retains full legal rights and can revoke the mandate at any time. Because it does not involve the courts, provisional custody by mandate is a flexible and low-cost option—but it does not provide the same legal strength or permanency as court-ordered custody. It also does not terminate parental rights or transfer full legal custody.

QUESTION: My family and I are facing possible foreclosure of our home, which we would like to avoid.

Are there any options available to try to avoid the foreclosure?

ANSWER: Here are some options.

Keeping your home and adjusting mortgage terms

1. Forbearance Forbearance is an agreement between the borrower and their loan servicer that either pauses or reduces the borrower’s monthly mortgage payments for a limited time. This option is for someone currently unable to make their monthly mortgage payments but thinks they should be able to resume making payments soon.

2. A payment deferral moves the missed mortgage payments to the end of the loan term, but the monthly mortgage payment amount stays the same. A borrower may consider payment deferral if his hardship has been resolved, but he is not able to repay the mortgage payments he missed as a lump sum or through increasing his monthly mortgage payment.

Options to keep your home and bring the mortgage current

1. With a repayment plan, the regular monthly mortgage payment increases for a short period of time to make up for the missed mortgage payments. A repayment plan must be longer than one month, but no more than 12 months. One may consider a payment plan if, for a period of time, he is able to afford his regular monthly payment plus a little more.

2. With a partial reinstatement, one pays as a lump sum part of the mortgage payments that he missed. To pay off the rest of the mortgage payments owed, the loan servicer will work with the borrower to create a repayment plan. One may consider a partial reinstatement if his hardship has ended and he is able to make a lump sum payment, but not the full amount owed all at once.

3. With full reinstatement, one pays as a lump sum the total mortgage payments owed, including taxes and insurance premiums paid, delinquent interest, any legal costs, and other expenses incurred by the loan servicer. A full reinstatement makes the mortgage current. One may consider full reinstatement if his hardship has ended and he is able to make a lump sum payment.

4. Refinancing one’s mortgage may lower his interest rate, or one may replace an adjustable-rate mortgage with a fixed-rate mortgage that is more affordable. One may consider refinancing if one is current on their mortgage payments but would benefit from a reduced payment in the future.

Options to exit home

1. When selling with equity, one can use the proceeds of selling their home to pay off their remaining mortgage debt. If the value of the home is greater than the amount owed, one will be able to keep any excess funds. One may consider selling with equity if his home equity is greater than the amount owed on the mortgage or any other debts secured by the home.

2. With a short sale, one sells their house for an amount less than the full amount owed. In some cases, the loan servicer may offer an incentive to help transition to more affordable housing. One may consider a short sale if one can no longer afford his mortgage payment and has exhausted all options to remain in his home.

3. With a deed-in-lieu of foreclosure, one voluntarily transfers the property title to their mortgage company, in exchange for canceling the mortgage debt. This plan allows a borrower to avoid foreclosure and make a graceful exit from his home. The loan servicer may also offer an incentive to help transition to more affordable housing. One may consider a deed-in-lieu of foreclosure if one has exhausted all other options.