There are several options you can pursue when you are behind on your home loan and you want to that me include a short sale.
An attorney can help you work through one or more of these alternatives.
Reinstatement: If the reason you have missed your payments was temporary and you’re now able to continue paying your mortgage, you may be able to reinstate your mortgage. You will probably need to bring your mortgage obligation up to date, late fees and penalties, and legal fees due up to the date that you reinstate.
Forbearance: If you would like to reinstate your home loan but the one-time payment is too high, there’s a chance that the bank will permit you to arrange a repayment schedule, or forbearance. If so, the bank will allow you to pay your debt over a particular time period or will tack the extra debt onto the end of the mortgage.
Rent The Property: In a few cases a property owner will have payments low enough to permit him/her to rent the property and pay the the difference between the rent received and the home loan payment out-of-pocket.
Refinance: If you have sufficient equity and income, and your credit has not suffered too large a hit, you may be in a position to refinance to a lower rate or better terms or get enough cash out to cover payments for a while.
Mortgage Modification: In cases where householders do have the means to afford their payments, or a payment close to their payment, banks may qualify the borrower for a mortgage modification.
Short-Refinance: The relatively new phenomenon of a short refinance illustrates just how far some mortgage corporations are prepared to go to avoid foreclosing on properties. This process involves the refinance of a home with a decrease in the principal balance and frequently the interest rate also. While relatively rare, if this opportunity is available, a lawyer can help you arrange a short-refinance.
Deed-in-Lieu: Frequently called a “friendly foreclosure,” deed-in-lieu occurs when the householder gives his deed back to the bank. In exchange for a non-contested repossession the banks will often give up their inherent legal right to a deficiency judgement; nonetheless, in most cases a short sale is more useful to the house owner. It is still a form of foreclosure and will have an impact on your credit as such.
Bankruptcy: Insolvency may allow the home-owner to rearrange his debt and keep his property. An attorney will help you with an insolvency.