Options to preserve the home, your investment, and your credit include the following. Note, not all options are available from all lenders and may depend on the particular circumstances:
Catch-up Plan: A plan to bring the loan current, usually by spreading the past due amount over several months in addition to the regular payment
Forbearance : Where the loan is recomputed, usually entails extending the term of the loan by the number of missed payments
Adjustment : Under certain circumstances, a lender may accept modification of the terms of the loan either in interest rate, balance due, or both
Short Sale: When the balance due is more than the value of the home, the lender may agree to a short sale to recover the bulk of the debt.
Regular Sale: When the value of the home exceeds the debt, then the home can simply be sold to pay off the note.
Deed-in-lieu: In this situation, the Owner turns over the keys and deeds the home back to the bank. Functionally, this is similar to foreclosure but without the bad marks on the credit report.
Note: there are credit reporting impacts from most of these options, but they do not carry the same penalty as foreclosure.