A borrower who is delinquent on his/her mortgage has some tough choices to make. Many who have found themselves upside down on loans have quite literally mailed the keys to their houses to their lenders and walked away, leaving the house to go into foreclosure. But, is this the best way to go? There are other options.

If you find yourself facing foreclosure, this article will outline your options. From here, we hope you decide on one of the two foreclosure alternatives. Did you know that foreclosed home in an otherwise desirable neighborhood could decrease the value of the other homes by as much as 55%? Before deciding on foreclosure, take a look at these two viable foreclosure prevention options:

Forbearance
Forbearance is basically a request from the lender to suspend the payment of monthly amortization within a specific period. The borrower can choose, but is not obligated to pay, the interest only during the period of a loan suspension. If the borrower cannot pay that interest, it may be added to the interest in the future payments after the termination of the forbearance. Or it can be added to the principal and extend the length of the loan. Forbearance could be granted for a year. After that, the borrower continues with the usual monthly mortgage payment.

Loan Modification
As hard as it may be to believe, lenders try and curb foreclosure rate. Why? It's in their best interest to do so. If your home goes into foreclosure, the lender will lose a great deal of money, especially now that home values are declining. As a result, you may already be receiving interest free offers and mortgage loan modifications from mortgage lenders to stay in the home. If you've received one of these offers, now is your chance to see what the lender has to offer. This alone could save you a huge amount of money, especially if you have a subprime adjustable rate mortgage (ARM) or a hybrid ARM (e.g., negative amortization, interest only or option ARM).

What is a loan modification? It's a renegotiation of the terms of your existing mortgage so that it's more affordable for you. For example, if you make less money now than when you bought your home, you may be able to not only renegotiate your interest rates, but also tack your arrearages to your mortgage balance, so you can quickly get current. You may also be able to negotiate away late payments and penalties, which could also save you a lot of money and make your mortgage more affordable.

The federal government and state governments recognize the need to curb foreclosures. As a result, there are several foreclosure rescue programs like FHASecure, where you can refinance your home into a low, fixed rate FHA loan. This program expires on December 31, 2008.

You could also refinance your home through the new Hope for Homeowners program that was recently passed as part of the Housing and Economic Recovery Act. This is basically a loan modification because your lender will have to agree to reduce the principal balance of your loan to 90% of your home's current value. Another federal program that promotes foreclosure preventionis available to you is an alliance between counselors, servicers, investors and other mortgage market participants called HOPE NOW. This is a loan modification program to which you could turn if you're having trouble negotiating with your lender. You can call them toll-free at 1-888-995-HOPE or

If you are an IndyMac or Countrywide customer, you may already be qualified for a loan modification. IndyMac customers, call toll-free at 1-800-781-7399 to speak with an IndyMac Federal customer service representative. You can also visit the FDIC website (www.fdic.gov ) or the IndyMac Federal website (www.imb.com ) to find out more about the loan modification program. Countrywide customers can call Countrywide’s customer service toll-free at 1-800-669-6607.