How Late Is Too Late To Stop A Foreclosure After Receiving The Notice Of Default Or Notice Of Sale?

A foreclosure can be a scary thing for a homeowner, and being well-informed and well-prepared are essential if he/she wants to keep their home. Often assistance professional is recommended.

When a homeowner fails to make payments on his/her mortgage for a certain amount of time, usually 3-6 months, the lender starts the foreclosure process. The process begins when the lender has a trustee file a Notice Of Default, or NOD, at the County Recorder's office of the county where the home is located. If the borrower does not correct the default within a certain period, usually 3 months, then a Notice of Sale is filed with the County, mailed to the homeowner, and published in a local newspaper 3 times over a period of 3 weeks.

A foreclosure may be stopped at any point in this process, after either the Notice of Default or the Notice of Sale is filed, and sometimes even after the home has been sold at auction(certain states, check your local laws, have a "redemption period" in which the home can be reclaimed by paying off all associated debts). The further the process goes, however, the harder it will be to stop, so it's recommended to begin fighting the process as soon as the Notice Of Default is filed.
There are many options when attempting to avoid foreclosure. The debtor can negotiate with the bank or creditor, preferably with the help of a professional service, to work out one of several options.

A "short pay" or "short refinance" is an option where the a settlement is reached for the amount due and a new loan is created, often called a foreclosure loan. If the borrower does not qualify for a loan covering the full amount of the settlement, they may get a loan for part of it and borrow the rest from friends or family.

A loan modification may be possible, where the terms of the loan are changed temporarily to allow the borrower to get back on his/her feet. A simple repayment plan may also be enacted, where the past due amount is figured into the payments until it is paid off and the loan is back on schedule.

A debtor may also work out a "deed in lieu of foreclosure". Usually in this case, the debtor trades the deed to the home in exchange for a forgiveness of debts, but the terms need to be carefully investigated to make sure all debts are forgiven.