Struggling homeowners opt for short sales to avoid foreclosure

WISCONSIN -- The 57-year-old career carpenter is losing the two-story, two-bedroom house he bought last year in Lodi for about $165,000, along with his $18,000 down payment.

He's never missed a mortgage payment, but he lost his job with a Madison remodeling contractor last July when business dried up, and he hasn't been able to find new work. For the past several months, he's been living on credit cards and unemployment insurance, he said, and this month, the unemployment ran out.

"Right now I just need to let this house go and go to where I can find work," he said, noting an old employer in Colorado has promised to hire him back if he can get there by August. "You take the best option you can get."

For Ronne, and for a sharply growing number of area homeowners tottering on the verge of foreclosure in the continuing housing slump, the best option in cases like this may be a "short sale" -- basically, a compromise payoff that protects a seller's credit score better than a foreclosure would while satisfying the bank and giving the buyer a below-market deal on a house.