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There are several alternatives for a homeowner to consider when foreclosure is looming. Before proceeding, a homeowner must first choose whether or not he or she wants to keep his or her home.

If a homeowner wants to keep their home:

• Repayment plan: The homeowner establishes a payment schedule with the lender to pay the delinquent amount.
• Special forbearance plan: The homeowner requests a temporary reduction or payment suspension that will be increased after a set specific period of to repay the delinquent amount.
• Modifying the mortgage: The homeowner can refinance the debt and/or extend the term of the loan.
• HUD partial claim: If the homeowner has a loan insured by the Federal Housing Administration the lender can get a one time payment from the FHA-Insurance Fund to get the mortgage payments up to date.
• Refinance: The homeowner can negotiate a new loan with a different interest rate in order to make smaller payments.
• All options listed are subject to approval of the lender.

If a homeowner does not want to keep their home:

• Sell the house: Depending on the situation, the homeowner may be able to sell the house for more than is owed to the lender.
• Assumption: The homeowner turns over possession of the house to another person who then assumes the responsibility of the payments.
• Short sale: The lender and the homeowner come to an agreement to sell the home at a loss in order to get the homeowner out.
• Pre-foreclosure sale: The homeowner can sell the home and use the proceeds to settle the mortgage debt, even if the proceeds are less than the amount owed.
• Deed in Lieu of Foreclosure: The homeowner surrenders the property to the lender without further damage to his or her credit.

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