If you are facing foreclosure, then there are various methods to avoid foreclosure without affecting credit report:

· Loan Modification is the best way to avoid foreclosure. It is the most popular foreclosure option that is widely used by the homeowners. You can get your loan modified by adding new terms in it. A loan modification can save a lot of money and it may include certain features such as lowering principal balance, converting to a fixed rate, lower down monthly mortgage payments, reduce interest rate, etc.

· Partial Claim is another Alternative Foreclosure Option which you can ask to your mortgage lender. This option works with you to obtain a one-time payment from the FHA-insurance fund. To qualify for the partial claim, make sure that your loan should be at least 4 months delinquent but not more than 12 months. You need to sign a promissory note and a lien will be placed on your property until the promissory note is fully paid.

· Another Foreclosure Option is that you can avail is short sale. In this, the lender agrees to sell his property on the lesser amount than the outstanding loan amount that forgives any remaining debt.

· Special Forbearance has also been suggested by your mortgage lender which gives a permanent reduction on your monthly mortgage or postpones the payments for a few months. You need to prepare a file of documents including the financial statements which should be submitted with the lender along with a hardship letter to prove that you can pay your payment plan.

· Short Refinance is also provided to avoid foreclosure. In this option, the lender forgives some of your debt and get refinanced the rest into a new loan.

President Obama has offered $1000 incentive for home owners that opt for Loan Modification instead of Short Sale Or Foreclosure.

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Loan modification is very useful to stop foreclosure. There are various HUD approved housing counseling agencies which can provide you the required assistance and information you need. Such help and information provided by the HUD approved agencies is very helpful and has already helped thousands avoid foreclosure by loan or mortgage modification. President Obama’s HASP program can help you refinance or modify your loan and you can reduce your monthly payments. The Homeowner Affordability and stability plan can help you keep your home. It has already helped many people in various states.

Various official government websites will help you to search various free services to avoid foreclosure. Such services are available in every state and are easily accessible. If you are eligible for the loan modification program, a counselor will help you in every step to stop your foreclosure.

Such free services are usually provided by the Government approved non profit housing counseling agencies. You won’t have to pay any fees for the services as these are totally free and useful for every home owner.

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