To reinstate a mortgage, the homeowner has to pay all the missed payments, late fees and legal fees that are due up to the date that the loan is reinstated.
- Forbearance or Repayment Plan
The lender allows the buyer to pay the missed amount over a period of time or the lender placees the missed payments on the end of the amortization of the loan.
- Rent the Property
In some cases, homeowners facing foreclosure will have payments low enough to allow them to rent their property to keep up their mortgage payments.
- Sell the Property
If sellers have equity in their property, they can sell it and prevent a foreclosure.
If homeowners have sufficient equity and income and their credit has not been too badly damaged, they may be able to refinance.
- Mortgage Modification
A loan modification is very similar to a lower interest refinance where the lender lowers the interest rate on the existing loan to lower the payments.
This process involves the refinance of a home with a reduction in the principal balance and often the interest rate as well.
- Short Sale
When homeowners owe more on a property than it is currently worth and one of the previous solutions does not apply to their situation, there is the option of pursuing a short sale.
- Deed-in-lieu of Foreclosure
A deed-in-lieu of foreclosure is sometimes referred to as a friendly foreclosure because the homeowner essentially gives the deed back to the bank.
A bankruptcy may stop a foreclosure and allow homeowners to reorganize their debt and keep their property.
- Servicemembers Civil Relief Act (SCRA)
This law provides certain protection to military personnel who are in foreclosure in specific situations.