For home owners who are having trouble making payments on their mortage, there are generally 4 options if they are NOT interested in a Short Sale.
1) Loan Modification: Loan modification is an option that some lender modify the terms of the existing loan to help home owners afford the monthly payment. But even the Federally sponsored Loan Modification programs like HAFA and may others have been spectacular failures since the lenders are not willing to service the debt on the underwater assets.
2) Deed in Lieu: is one the options available to home owners who are struggling to make their mortgage payments. In the case of Deed in Lieu, owners agree to transfer the title of the property to the lender instead of a lengthy foreclosure process. Deed in Lieu requires the consent of BOTH the lender and the owners of the property. This is not an option where the owner can transfer the deed to another person since it requires the lender’s consent.
3) Bankruptcy: This option provides the home own to use the courts to settle with their creditors and the lender on their home. Although this option delays the foreclosure proceedings till the bankruptcy is discharged, but in most cases, the home owners will end up losing their home and the lender will eventually receive the deed to the property through the courts.
4) Foreclosure: One final alternative to Short Sale is Foreclosure where the lenders use either the courts in Judicial States or the Trustee Sale (Trustee States like California) to remove the property from the possession of the home owner and sell it at Auction.
However, home owners should contact the Dept of Housing and Urban Development (HUD) to explore all their options using a HUD Counselor who will advise them of all of their options.