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You can negotiate with your lender to sell your house, without a foreclosure, for less than the amount you owe on your mortgage. This is called a short sale. If you live in a state that allows your lender to sue you for the deficiency (the difference between the amount you owe on the mortgage and the sale price of your home), a short sale can be a good idea but only if you get your lender to agree (in writing) to let you off the hook for the deficiency.