Sale and discounted loss: It is possible that before initiating the foreclosure proceeding, the lender that manages your mortgage allowed to sell their home on their own and agreed to write off the difference between the sale price and the balance of your mortgage. Through this option, you can avoid the entry of a foreclosure on your credit report that harms your credit rating. You may have to take over the payment of taxes levied on the amount of their debt forgiven. For more information, consider consulting a financial adviser, accountant or lawyer. Deed in lieu of foreclosure: In this option, you will voluntarily transfer title of ownership to the lender that manages your mortgage (with the agreement of the entity) in exchange for the cancellation of the balance of its debt.
Even if you lose your house, the option deed your property to the lender instead of running it may be less damaging to your credit score. You will lose the amount of whatever is capitalized as amortization of the mortgage on your property and you may have to bear the taxes levied on the amount of their debt forgiven. It may be that the option of writing in lieu of foreclosure is not an option in your case if you have any other loan or financial commitment secured by your property.
You do not have to go through the process of foreclosure prevention alone. A counselor who works at a counseling agency in housing issues can assess your situation, answer your questions, discuss your options, prioritize your debts and help you prepare for discussions with the lender.
