How to stop foreclosure: your options, by how much time is left

What are the ways to stop a foreclosure?

The CFPB lists the options a servicer might make available: refinance, a loan modification, a repayment plan, forbearance, a short sale, and a deed in lieu of foreclosure. You can also sell the house yourself or file for bankruptcy. Which ones fit depends mostly on one thing: how much time is left before a foreclosure sale. The sections below go from the most time to the least.

The federal rules here apply to most mortgages on a house that is your principal residence (12 CFR 1024.30). Small servicers and reverse mortgages are exempt from many of them, though small servicers still must follow the 120-day rule (12 CFR 1024.41(j)).

If you have just missed a payment

Call your servicer right away. A servicer generally must try to reach you by the 36th day of a missed payment and send a written notice of options to avoid foreclosure by the 45th day. 12 CFR 1024.39

• Repayment plan. You add part of the past-due amount to your regular payments until you catch up. The servicer may still treat the loan as delinquent until you repay everything, and may still report it to the credit bureaus (CFPB).
• Forbearance. Your servicer lets you pause payments or make smaller ones for a time. You still owe the full amount and pay back the difference later (CFPB).
• Catching up in one payment. If you can pay the missed amount, ask the servicer for the exact figure in writing first.

Before the loan is 120 days behind

A servicer generally cannot make the first notice or filing for a foreclosure until the loan is more than 120 days delinquent. 12 CFR 1024.41(f)(1) This is often the best time to apply for loss mitigation, the term for options that help you keep the house or leave it without a foreclosure. If the servicer receives a complete application in this period, it cannot make the first filing until it decides you are not eligible and any appeal ends, you reject its offers, or you do not keep up with an agreed option. 12 CFR 1024.41(f)(2)

• Loan modification. A change in your loan terms, such as a longer repayment period or a lower interest rate, that can bring the payment to an amount you can afford (CFPB).
• Refinance. A new loan that pays off the old one, if you qualify (CFPB).
• A planned sale. Selling the house while you are still current or only a little behind usually gives you the most time and the most choice.

After foreclosure starts

States run foreclosure in one of two ways. In a judicial foreclosure, the lender files a lawsuit. In a non-judicial foreclosure, the lender can foreclose without going to court, through written notices. CFPB

• Reinstatement. You bring the loan current. If the lender has accelerated the loan, it generally can require the full past-due amount, and costs can be added (CFPB).
• A complete loss mitigation application. If the servicer receives it more than 37 days before a foreclosure sale, it must evaluate you for all available options within 30 days (12 CFR 1024.41(c)(1)), and it cannot move for a judgment or order of sale, or hold the sale, until the application is resolved (12 CFR 1024.41(g)).
• Contesting the case. In a judicial state, the court case is where you can raise defenses. A lawyer can tell you whether you have one.

When a sale date is set

• Pay off or reinstate. Ask your servicer for a written payoff statement. It generally must send one within 7 business days of a written request (12 CFR 1026.36(c)(3)).
• Sell the house. A sale that closes before the sale date and pays off the loan ends the foreclosure. See how selling stops a foreclosure below.
• Short sale. If the price will not cover what you owe, the lender must agree to a short sale. In some states the lender can sue for the shortfall, so ask for a written waiver of the deficiency (CFPB).
• Deed in lieu of foreclosure. You give the house to the lender. Make sure it covers the entire amount you owe (CFPB).
• Bankruptcy. Filing creates an automatic stay that pauses acts to enforce a lien on your house, including a scheduled sale (11 U.S.C. 362(a)). The stay has limits: a lender can ask the court to lift it, and repeat filings within a year get a shorter stay or none (11 U.S.C. 362(c)(3), (c)(4), (d)). Chapter 13 can let you cure a default on your principal residence through a plan, until the house is sold at a foreclosure sale (11 U.S.C. 1322(b)(5), (c)(1)). A bankruptcy attorney can tell you whether this fits.

Once the foreclosure sale is held, the options narrow to what your state allows, such as a redemption period in some states. Ask a lawyer in your state right away if a sale has already happened.

Which way to stop foreclosure fits your situation?

Does it matter which state you live in?

Yes. The federal rules above set a floor, but each state sets its own foreclosure process, notices, and timeline. Whether your state uses judicial or non-judicial foreclosure changes how long the process can take and where you can raise a defense (CFPB). Ask a lawyer in your state or a HUD-approved counselor what applies to your loan.

Our state guides walk through the local steps: Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, North Carolina, Ohio, Pennsylvania, Tennessee, Texas.

How does selling the house stop a foreclosure?

If the sale closes before the foreclosure sale and pays off the loan, the foreclosure ends, because the debt behind it is paid. If the price will not cover the loan, the sale needs the lender's agreement as a short sale (CFPB). Tell the buyer and the title company about any sale date on the first day.

Propcash is a direct cash homebuyer: it buys houses as-is, makes one data-backed cash offer with no obligation, charges the seller no fees, and can close in as few as 7 days because no buyer's mortgage is involved. A sale is one option among several. If you want to keep the house, talk to your servicer and a housing counselor first.

For the sale itself, read our guide to selling a house in foreclosure, or see selling a house in foreclosure or behind on payments.

Where can you get free help?

HUD-approved housing counseling agencies provide foreclosure prevention counseling free of charge, and they can help you talk to your servicer (CFPB). Find one through HUD or the CFPB's counselor finder, or call the HOPE Hotline at (888) 995-HOPE (4673), which the CFPB lists as open 24 hours a day. If you have been served with legal papers, you may also need an attorney.

Get a cash offer, with no obligation

If selling is one of the paths you are weighing, you can request a cash offer. The offer is free, there is no obligation, and you can compare it with the options from your servicer and your counselor.