Avoid Foreclosure

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There are two fairly straight forward ways to avoid foreclosure on your home. Unfortunately, neither way will prevent you from having to give up your house and neither will be much better for your credit. The two options will prevent you from having an actual foreclosure on your credit report and you will be free of any mortgage debt.

The first option is to short sale your house which means sell your house for less than what you owe on it. This amount is agreed to by your lender and they usually forgive the difference from what it is sold for and what you actually owe them for it.

The other option is giving the deed to the mortgage company in lieu of foreclosure, which basically means you just give the lender your house and you walk away. Again, the lender will forgive the difference between what they resell it for and what it is worth.