It's an unfortunate fact of life that after your mortgage lender forecloses and actually sells your home to a new buyer, it may be difficult – if not impossible – to get your home back. If your state doesn't offer a redemption period, you may have very few options. However, you might be able to regain your home up to the date of the sale.
Before Foreclosure Starts
The easiest way to save your home from foreclosure is to prevent the process from starting. When you first fall behind with your payments, your lender will reach out to you to urge you to catch up and warn that it will foreclose if you don't. During this period, you might be able to restructure your loan to make it more affordable, or make arrangements to catch up the past-due balance incrementally while you make current payments. The federal government offers the Home Affordable Modification Program to qualified home buyers, allowing them to lower and resume current payments while adding past due payments to the mortgage's principal balance.
In states that provide for judicial foreclosure – approximately half – your lender must file a lawsuit against you before proceeding to reclaim and sell your home. You have the right to fight the process in court to try to save your house. For example, there might be an error in your lender's foreclosure documents or the lender might have overlooked some legal requirement. You'd probably do best to hire an attorney to help you if this is the case. If you don't fight a judicial foreclosure in court, your lender will probably receive permission to proceed by default.
Another option is to attempt to reinstate your mortgage, and you can usually do this right up until the day before your lender auctions your property to a new buyer. When you receive your official foreclosure documents, they should include instructions for how you can do this. The process typically includes making all your past due mortgage payments in a lump sum, as well as late fees and the lender's costs in initiating the foreclosure, including attorney's fees and legal fees.
Some states offer redemption periods after a foreclosed home sells at auction. These periods average from three to six months, and some states extend the time if you've already paid off a significant percentage of your mortgage balance. During this time, you have the right to buy your home back if you can swing the financing or get the money from some other source. You must essentially match the winning auction bid. You may also owe the extra costs of the foreclosure process, just as if you had reinstated your mortgage, and any interest or penalties that accrued on your loan while you were in default.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.