To Avoid Foreclosure
The best way to stay in (not sell) a house that you want to keep long term may be a loan modification. This involves a lender modifying your payments so that you can afford to keep making them. The modification could include lowering the interest rate so that the payment is lower, or even adjusting the principle balance on the loan.
Advantages and Disadvantages
The advantage of a loan modification is that it can make an unaffordable loan affordable.
The disadvantage of a loan modification is that, based on our observations, most of the time the houseowner pursues these, they are ultimately not approved, or almost certainly not approved in a way in which it is helpful enough for the houseowner to stay in the house. In other words, most of the time it does not work and the result is foreclosure.
In a typical scenario, a houseowner will hire an expert to negotiate the modification. Please carefully research any company that offers this service for a fee. Usually the houseowner will be told to stop making payments during the negotiation. At this point the lender will tell the houseowner that a modification is being considered. Unfortunately, based on our observations, most of the time the modification is ultimately denied (just before a foreclosure) and the houseowner is not able to make up all of the late payments and significant interest, penalties, and legal fees, and thus the result is a foreclosure.