Who was the investor and why did they not want to modify the loan. Call the bank and ask! Can you do a repay plan on the loan or can you reinstate the loan? You should talk to people to see your options, if nothing else call HOPE Homeownership Preservation Foundation at 888-995-hope.

Kay,

If the bank denied your loan modification then may be short sale is an option to avoid foreclosure. There are lots of other people in the same situation as yourself. The reason for denial is may be because of not enough income to support new payment or your debt to income ratio is higher.

At this time, the only other option is to do a short sale. If you can successfully short sale then you can buy another house after 2 years and may be in a cheaper price. Contact a local agent who is experienced in short sale so that they can help you to sell your house. You can consult with a CPA or tax attorney for any tax implications.

Many are not willing to modify. A short sale or deed in lieu may be your only alternative.