Can I Save My House From Foreclosure If the Auction Date Is Only a Few Weeks Away?

Foreclosure isn't a swift process, and banks can take anywhere from a few months to a year or more to auction off your home. Once you receive formal notice of an auction date, however, the time you have to save your home is drawing to a close. Fortunately, foreclosure doesn't have to be inevitable. You still have options to prevent the foreclosure even if the auction date is mere weeks away.

Filing for bankruptcy is a last resort because of the extensive damage a bankruptcy does to your credit rating. Nevertheless, a bankruptcy can prove invaluable in your quest to save your home. Unlike Chapter 7 bankruptcy, which may require you to sell your home, Chapter 13 allows you to avoid foreclosure while also retaining ownership of your property.

When you file your bankruptcy case, an automatic stay prevents any creditors from pursuing you for your debts -– this includes foreclosing on your home. The court will set a payment plan that allows you to stay in your home and pay off your delinquent mortgage balance over a three to five year period.

If you haven't had an open line of communication with the lender from the beginning, start now. A looming auction date generally indicates that its too late to negotiate a short sale or apply for a loan modification, but your lender may agree to other foreclosure alternatives.

If your lender approves a forbearance, for example, it will temporarily postpone your mortgage payments and the foreclosure auction, giving you more time to come up with the delinquent amount. Your lender may also agree to accept a deed-in-lieu of foreclosure. In a deed-in-lieu arrangement, you sign over the home's title to the lender and walk away. Although a deed-in-lieu doesn't allow you to keep your home, it does prevent a foreclosure that would haunt your credit history for years to come.

If you have reason to believe that any aspect of the foreclosure process was fraudulent, you have the right to sue your lender and ask that the judge either postpone or terminate foreclosure proceedings. If you choose this route, you must demonstrate specific reasons why the court should halt the foreclosure. For example, if the lender did not follow state-specific foreclosure procedures, or the loan terms are blatantly predatory, a judge may postpone or cancel the auction date. Even if the court merely postpones the auction date, this postponement provides you with crucial time to explore other property-saving options.

If you had the necessary cash to pay off your delinquent mortgage, you likely would have done so by now. Beneficial changes to your financial situation, however, such as a loan from a family member or an unexpected inheritance, could give you the ability to bring your delinquent mortgage current. If your lender accepts the payment, the foreclosure process stops and you can resume making your normal monthly payments. If your lender demands that you pay off the loan in full, you must pay off your mortgage in its entirety before the lender will cancel the foreclosure sale.