Consider giving up your home without foreclosure.

Unfortunately, not every situation can be resolved through your loan servicer’s foreclosure prevention programs, or sometimes they may deny you help paying bills and your loan. If you’re not able to keep your house, if you do not want to keep it, or if these steps do not work, also consider:

Selling Your House: Your servicers sometimes will postpone the foreclosure proceedings if you put your home on the market or have a pending sales contract. This approach will often work if the sale price can pay off the entire mortgage balance plus any additional bills or expenses connected to selling the home (as an example, real estate agent fees). A sale this way would also allow you to avoid legal bills and late fees. It will also stop damage to your credit rating, as well as protect your equity in the property.

Short Sale: This means your servicer may grant you permission to sell the house yourself before the servicer forecloses on the property. Short sale means that they agree to forgive or waive any shortfall between the sale price and the mortgage balance. This approach also avoids a damaging foreclosure on your credit report. However, be sure to review this as you may face a tax liability on the amount of debt forgiven. We more than likely will need to consult an accountant,  financial advisor, or attorney for more information. It is strongly recommended.

Stay in your home: Possibly the opposite of giving up your home. However, many attorney are recommending that people do not leave their home, that they stay in it even after foreclosure. This can buy you months of time, and often force the lenders hand so they will modify your loan or offer you additional options. More.

Deed in Lieu of Foreclosure: You will voluntarily transfer your home title to the servicers name (along with the servicer’s agreement) in exchange for cancellation of the remainder of your debt. Though you will still lose your home, a deed in lieu of foreclosure will often be less damaging to your credit than a foreclosure. You will also lose any equity you may have had in the property, and you may also have an income tax liability on the amount of debt forgiven.