So, you have decided to not sell material items, rent out a room, or get a second job to help pay your mortgage. What do you do next? Well, the next best step is to have a short sale. But what if your bank won't agree to a short sale?
Believe it or not there is a chance your bank will not agree to a short sale. But most banks will agree if they feel what they can get from the short sale is more than the cost they will incur with realtor fees, advertisement and marketing fees, maintenance fees, etc. to foreclosure on your home. So chances are they will agree to the short sale.
But if you are turned down for a short sale your next step is probably a foreclosure. The only other option in between the two is known as a "deed in lieu of foreclosure." In this case you hand over the deed to your house to the bank, who takes the house without going through the formal foreclosure process. Kind of like a voluntary repossession. While this is an option, it is not usually offered by lenders.
If you are absolutely going to let go of the house and you can not agree on a modification then a short sale or foreclosure are your alternatives.
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