Which of the following is the first non-foreclosure response to default?

The first non-foreclosure response to default is credit counseling. When a borrower encounters financial difficulties and starts to default on their mortgage, credit counseling is often the initial step they take before considering more formal measures like short sales or deeds in lieu of foreclosure.

Credit counseling involves working with a professional who can help borrowers understand their financial situation, develop a budget, and explore their options for repayment or debt management. This proactive approach aims to find a solution that allows the borrower to retain their home where possible and avoid the long-term consequences of foreclosure.

In contrast, actions such as short sales or deeds in lieu of foreclosure come later in the process. They are typically considered when the borrower is unable to maintain their mortgage payments and is looking for alternatives to foreclosure that may help mitigate the financial damage. Consumer debt reorganization is another step that may involve significant restructuring of debts, but it is also not typically the first line of defense.

Therefore, understanding credit counseling as a preliminary and supportive measure is essential for borrowers facing financial challenges, reinforcing its importance as the first response to default.