Depending on your circumstances, there are several different options that you may have, but going through with foreclosure is the worst option. Ideally, you would like to get a workout or a loan modification done. If those don’t work, you can try to sell outright or do a Short Sale, a Deed in Lieu of foreclosure or Bankruptcy.
A workout is when they take the amount of money that you are behind and add it to your monthly payment until it is re-paid. This usually does not work because if you were having trouble paying a $700 per month payment, then it is even hard to pay $1100 per month to get you caught up on what you were behind.
A Loan Modification is the best and popular way to go right now. It could get you into a lower rate, that will lower your payments, and the amount that you are behind gets put onto the back of the loan along with a few hefty fees that your bank will probably charge. The government is even giving incentives to banks to do loan modifications right now.
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