If your lender won't modify your loan and you're facing foreclosure, you may want to consider a short sale.

In a short sale, you agree to sell your home for an amount that's less than what you owe on your mortgage.

Your lender also has to agree to waive whatever you still owe on the home, which is the difference between your mortgage balance at the time of the sale and the proceeds of the sale.

The main advantage? You'll walk away with no debt, and your credit history won't be as damaged after a short sale as it would be after a foreclosure.

If you want to buy a home again, you can qualify for an FHA-backed loan within two years. If your lender forecloses on your home, you have to wait five years.

If you have a second lien on your home, such as a home equity loan, that lender also has to agree to the sale.

Sometimes those banks will write off your home equity loan as a total loss. Sometimes they'll ask for a few thousand dollars. Sometimes they'll demand full payment and wreck the deal.

But if you're facing foreclosure and want to see if a short sale might be an option for you, take a look at our step-by-step advice on how to do a short sale.