The housing crash around the country is widely known and is probably the leading contributor to the economic problems the country faces. But this isn't all that the housing boom and subsequent crash has brought to the American public. We're now facing a foreclosure crisis fueled by illegal robo signing practices used by the banks. Summed up, this means that many Americans have faced foreclosure in the last few years and it's quite possible that the rest of the year will bring even more foreclosures. The federal government realizes that this is a large problem and has started several programs to try and help people out of a foreclosure situation.
People that find themselves facing a foreclosure and know they can no longer afford their home but want to avoid having a foreclosure attached to their credit record can turn to the federal government's Home Affordable Foreclosure Alternatives (HAFA) for help.
HAFA helps people communicate with their mortgage lender and transition from a mortgage into a short sale or a deed in lieu of foreclosure. In a short sale the mortgage company is willing to accept the amount you can get for the sale of your home, it's called a short sale because, due to your current housing market, the amount you'll get for your home is often short of the amount you still owe. A deed in lieu means that the mortgage company will agree to accept the title to the home and you walk away with nothing, this is another situation though where the home loan is worth more than the current value.
If you don't want to lose your home there are some programs the federal government offers for loan modifications but if you decide to do a managed exit you still may be able to save your home in what is called a "redemption", a period after your home has been sold that you can still reclaim it by paying all outstanding fees.
Make sure you speak to a professional right away so you can pursue the outcome that best benefits your situation.