One of the most popular alternatives to foreclosure is special forbearance. With special forbearance a lender can suspend or possibly reduce your payments. This will usually only be a short period of time lasting a few months. However, some lenders will work with you in order to extend the time period for which it will last. (Also check out our free credit repair tutorial)

The only downside to a special forbearance is that once the suspension period has been reached you will be required to either enter into a new longer repayment plan in order to pay back the total dollars that were suspended or reduced. Or, you may be required to make one payment at the end of the special forbearance to make up for monies lost.

Many people choose this method or ask lenders to extend it when they know they will be coming into a large sum of money within a set amount of time. This allows them to be free from the monthly debt until the large sum of money comes in.

Some lenders are even willing to work with a client in the creation of a repayment plan as an alternative to foreclosure. A repayment plan could consist of a set amount of money given each month that consists of your regular mortgage payment along with a tacked on fee that will cover the set default. These types of repayment plans generally last a few short months, though some lenders will work to extend the repayment plan to a year.

Once the time period has ended the past due total will be paid in full and your payments will go back to the original amount due monthly.

Note that some lenders will require that their clients pay a large up front portion as a means of good faith before entering into such a plan with you. However, if you are able to carry off a good faith payment this may be the best alternative to foreclosure.

Another foreclosure alternative that some people choose to take advantage of is known as a pre-foreclosure sale. A pre-foreclosure sale allows the homeowner to sell their property. The money made from the sale will then be used to pay off the mortgage loan. This will prevent foreclosure and damage to your credit rating. Many people choose this method in order to protect their credit and will then turn around and enter a new agreement in buying or renting a new home.

There are many alternatives to foreclosure not mentioned herein that you may also want to look into including: mortgage modification, partial claim, and Deed-in-lieu of foreclosure.

However, keep in mind that not all lenders are willing to consider new terms or alternatives of payment. Still, this is something that you can discuss with your lender in order to find a method of payment that will benefit both parties.