Below is a list of foreclosure prevention options which are available to financially troubled homeowners having a difficult time staying current on mortgage payments.

Foreclosure is a legal process that involves the lender taking back ownership of a mortgage property and then selling it. This occurs because a homeowner's loan is in default or the owner is delinquent with the necessary mortgage dues.

If you make timely payments on your modified loan, you will receive "success incentives". If you pay on time every month, you will accumulate an incentive that reduces the principal balance on your loan. If it ceases to be in good standing (i.e. three monthly payments due are unpaid on the last day of the third month) no further success incentives will be paid including those accrued by unpaid amounts. $1,000 will be applied directly to your loan balance annually. Over five years, the total principal reduction could add up to $5,000!

Home Affordable Modification Program (HAMP)

Lowers the monthly mortgage payment to 31% of verified Gross income by lowering interest rate, extending loan term or reducing principal amount;

- Must own a one-four unit home as a primary residence
- Must have received mortgage on or before January 1, 2009
- Must have a monthly mortgage payment that's more than 31% of monthly Gross income
- Must complete a 3-4 month trial period after initial loan modification is complete before the   mortgage is permanently modified
- Less impact on credit score than a foreclosure

Traditional (in-house) Loan Modification

Lowers the monthly mortgage payment to a more affordable amount by either lowering the interest rate, extending the loan term or reducing the principal amount;

- Benefits borrowers who do not qualify for HAMP
- Lenders set their own guidelines and qualifications
- May be applied to any property
- Less impact on credit score than a foreclosure

Principal Reduction Alternative (PRA)

Designed to help qualified homeowners with homes which are worth significantly less than the balance owed;

- Mortgage must not be owned or guaranteed by Fannie Mae or Freddie Mac
- Balance owed must be more than home's value
- Must be your primary residence
- Must have received mortgage on or before January 1, 2009
- Must have a monthly mortgage payment that's more than 31% of monthly Gross income

Home Affordable Unemployment Program (UP)

Allows qualified homeowners to pay only a portion (or nothing at all in some cases) of regular mortgage amount for a minimum of 3 months;

- Must own a one-four unit home as a primary residence
- Must have received mortgage on or before January 1, 2009
- Must be able to provide proof of currently receiving unemployment benefits
- Less impact on credit score than a foreclosure

Home Affordable Refinance Program (HARP)

Insures that a qualified current homeowner stays current on mortgage;

- Must own a one-four unit home as a primary residence
- Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
- Must be current on mortgage for the last 12 months
- First mortgage must not exceed 125% of current market value of home
- No impact on credit score

Forbearance

Allows qualified homeowners to pay only a portion (or nothing at all in some cases) of regular mortgage amount for a specific period of time;

- Offset amount will need to be repaid after forbearance is up
- Less impact on credit score than a foreclosure

Repayment Plan

Allows qualified homeowners to catch up on any past-due amount over a specific period of time;

- Less impact on credit score than a foreclosure

Second Lien Modification Program (2MP)

Lowers the monthly mortgage payment on Second mortgage;

- Must have the first mortgage already modified under HAMP
- Less impact on credit score than a foreclosure

Home Affordable Foreclosure Alternatives (HAFA)

Designed to help qualified homeowners transition to more affordable housing by streamlining the Short Sale and Deed-in-Lieu options as well as providing $3,000 in relocation assistance;

- Must not have qualified for a mortgage modification through any of the Making Home   Affordable Programs
- Or must have failed to successfully complete the trial period of a previous loan modification
- Or must have missed at least two consecutive payments once in a permanent modification
- Or must have requested a short sale or deed-in-lieu of foreclosure

Deed-in-Lieu

Stop foreclosure by willingly surrendering the property to the mortgage servicer;

- May be able to apply for a new mortgage in as little as 2 years
- Less impact on credit score than a foreclosure

Short Sale

Stop foreclosure by selling your home for less than the balance remained on the mortgage and paying off the balance with the proceeds;

- May be able to apply for a new mortgage in as little as 2 years
- Less impact on credit score than a foreclosure