Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and the borrower called a "mortgage" or "deed of trust." Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien."

There are ways a homeowner may be able to avoid or stop a foreclosure:   

• Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage. However, most people lack the money to make a full payment.
• Mortgage Modification:  Depending on your circumstances, you may be eligible for a loan modification.  For instance, you may be able to extend your repayment term or modify your interest rate to lower your monthly payment to an affordable amount. 
• Federal Assistance Programs:  Certain homeowners at risk of foreclosure qualify for mortgage assistance from the federal government.  Options may include refinancing the mortgage into a new loan insured by the Federal Housing Administration.
• Chapter 13 Bankruptcy: Under a Chapter 13 bankruptcy, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time - typically over a three-to-five year period. The arrearage is paid through a court-appointed official, while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the law day or sale date.

Frequently Asked Questions

• How do creditors get paid when foreclosing on a house to satisfy unpaid debts?
  A foreclosure is where the creditor collects its lien by forcing a sale of the debtor's real property. The creditor receives the amount of the proceeds from the sale equal to the unpaid debt plus … more
• What is the Homeowner Affordability and Stability Plan?
  Congress recently passed the Homeowner Affordability and Stability Plan (“the Plan”), which provides various options for homeowners who are feeling the pressure of their monthly … more
• When and why does foreclosure begin?
  Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in … more
• What is a loan modification, and how will it help me with my mortgage?
    A loan modification occurs when a homeowner enters into an agreement with his or her mortgage loan servicer to change the terms of the mortgage. The goal of a loan modification is to … more
• How long does it take to get a loan modification?
    The length of time that it takes to get a loan modification depends greatly on how long it takes your mortgage holder to process your loan modification, as well as how long it takes you to … more