 TITLE: What Is a Strategic Foreclosure? CONTENT: Alternatives to Walking Away From Your House\n--------------------------------------------\nWhen weighing the pros and cons, you may feel understandably hesitant about going through with a strategic foreclosure. Thankfully, there are some alternatives that could help you get back on the right track financially without having to walk away from your home. Here are some potential solutions to consider:\n*   **Try to negotiate a short sale.** Your lender may agree to let you sell your home for an amount that's lower than what you owe on the loan. Known as a short sale, it allows you to cut your losses in a way that avoids foreclosure. Short sales do have a negative impact on your credit, but it's not as significant as a foreclosure. Think of it as a best-worst option. A similar solution is something called a deed in lieu of foreclosure, which is when the lender agrees to cut you loose from your mortgage payments if you give up the property deed.\n*   **Consider refinancing.** If you're tied to a high-interest loan, a good portion of your monthly payment may be getting diverted from your principal balance. Refinancing and getting a better interest rate can help you chip away at that amount faster—and increase your home equity quicker. As a result, refinancing could help you get out from under an upside down mortgage without having to go through a foreclosure. Be prepared for your lender to say no, however, as borrowers are typically required to have at least some equity in the home to qualify for a refinance.\n*   **Seek help from a nonprofit organization.** Sometimes a little financial guidance can go a long way. Before moving forward with a strategic default, consider reaching out to a nonprofit credit counselor. These organizations are designed to help consumers create a budget, better understand their credit reports and credit scores, and improve their financial literacy. Taking these steps might be enough to help you solve your mortgage woes without defaulting on your loan.\n*   **Look into a debt management plan.** This involves making payments to a nonprofit credit counseling agency that will in turn make sure your creditors get paid. Debt management could help you lower your interest rates and pay down your accounts to free up money you can then put toward the principal balance of your mortgage, which will help you build up more equity. END