Free help first: Delaware's Automatic Residential Mortgage Foreclosure Mediation Program is free for owner-occupied 1–4 unit homes in foreclosure. Hotline (800) 220-5424 · mortgage.mediation@delaware.gov. A HUD-approved housing counselor can also help at no cost.
How foreclosure works in Delaware
Delaware is a judicial foreclosure state. The lender has to file a lawsuit in Superior Court, usually called a scire facias sur mortgage action, and get a judgment before the house can be sold at a sheriff's sale. In broad strokes:
- Missed payments and notices. After you fall behind, the servicer sends notices. Federal rules generally bar a servicer from starting foreclosure until the loan is more than 120 days delinquent.
- Complaint filed. The lender files in Superior Court and you're served. Read everything and note every deadline.
- Mediation. For owner-occupied homes, Delaware's mediation program gives you a chance to sit down with the lender before the case moves forward.
- Judgment. If the case isn't resolved, the lender gets a judgment.
- Sheriff's sale. The county sheriff auctions the property. The sale is later confirmed by the court.
The whole process often takes many months. That's time you can use, but only if you act early.
Your options, from keep-the-house to sell-the-house
| Option | What it is | Good fit when |
|---|---|---|
| Loan modification | Lender changes the rate, term, or balance so payments are affordable | Your income has recovered or stabilized |
| Repayment plan / forbearance | Catch up over time, or pause payments temporarily | The hardship was short-term |
| Reinstatement | Pay all past-due amounts and fees in one lump sum | You have access to the funds |
| Sell the house yourself | List it or sell to a cash buyer before the sheriff's sale; the mortgage is paid off at closing | You have equity and can't realistically keep up payments |
| Short sale | Sell for less than you owe, with lender approval | You owe more than the house is worth |
| Deed in lieu | Give the house back to the lender instead of going through foreclosure | No equity and no other workable option |
| Bankruptcy | Chapter 13 can stop a sale and set up a catch-up plan | Talk to a bankruptcy attorney |
Why selling before the sheriff's sale can matter
If there's equity in your house (it's worth more than the mortgage plus fees), a sheriff's sale can wipe much of it out. Auction prices are often low, and legal fees and costs keep piling onto the debt. Selling first means the payoff happens at a normal closing and you keep whatever is left.
Timing matters. Delaware's Mortgage Rescue Fraud Protection Act (6 Del. C. Ch. 24B) treats buying a home in foreclosure within 20 days before the advertised sale date as a regulated "foreclosure consultant" service, and it strictly regulates any deal that lets you stay or buy back. Start early, and talk to an attorney or HUD-approved counselor (800-569-4287) before signing anything.
What a pre-foreclosure sale looks like with us
- We look at your payoff estimate, the condition of the house, and the sale date if one is scheduled.
- We give you a written offer and tell you plainly whether you'd likely net more by listing.
- The settlement attorney orders the official payoff, pays the lender directly at closing, and pays you the difference.
Scams to avoid
- Anyone who charges an upfront fee to "save your home." Never pay in advance.
- Requests to sign your deed over to someone who promises you can "rent it back and buy it later."
- Pressure to sign today, or to sign documents with blank spaces.
- Being told not to talk to your lender, a housing counselor, or an attorney.
This is general information, not legal advice. If you've been served with a foreclosure complaint, talk to a Delaware attorney or a HUD-approved housing counselor right away. Deadlines matter.
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