The foreclosure process can be stopped at almost any point, but the longer the debtor waits to deal with the problem, the fewer options he/she has.
After the sale date has been set, there are still multiple options for stopping the process and maintaining ownership of the property.
Many states, though not all, even have a redemption period where the debtor can reclaim the property even after it has been sold at auction if he/she is able to repay the full mortgage amount plus any fees incurred during the foreclosure process.
The debtor can negotiate with the bank, usually with the assistance of another entity, i.
e.
a stop foreclosure service or a lawyer, to possibly work out one of several options.
Refinancing with a short pay or short refinance is one option where the debt is settled for a certain amount and a new loan is created, or or one can refinance as much of the settled debt as possible and borrow the rest from friends or family.
It may also be possible, if the bank is willing, to modify the loan, usually temporarily.
This can be difficult to do, and will usually require the assistance of a professional foreclosure negotiator.
The creditor also may be willing to work out a repayment plan.
Normally a large down payment and proof of income is required.
A deed in lieu of foreclosure may be arranged, which essentially means the property is give back to the creditor and all debts are forgiven.
The debtor needs to be clear on the terms of this arrangement however, to ensure that all debts will be forgiven.
The debtor will not keep the house, but it can sometimes be a better option than foreclosure.