Another alternative is a Forensic Loan Audit to determine if any Federal Laws were violated in the application and granting of the Mortgage Loan. If your loan was a refinance or an original mortgage taken out during 2003-2008 (the mortgage feeding frenzy) there is a possibility there may have been violations. These violations can range from lack of proper disclosure to outright fraud. When there are violations there can be consequences for the lender. These can include in some cases not being able to foreclose on the home, returning all interest payments, potential for law suits, etc. When there are violations it can give the home owner leverage in negotiating a short sale or pursuing other options with the lender.
You can learn more about Forensic Audits here:
If the foreclosure were by a Homeowner or Condo Association, or even by the Sheriff for non-payment, then the answer would be different, because you do get a redemption period by law, in which you can go back and pay off the amount owed plus fees and get the property back. A mortgage lender does not fall under these same rules. Once the bank forecloses, you're done. (Egregious errors are the only exception.)
The bad news is that the foreclosure will follow you for years and years on your credit report.
To understand how your credit is affected and what steps you can take to improve your credit score, please visit my website that gives you a free on-line credit repair course, too.