How To Legally Stop a Foreclosure
By Andra DelMonico, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on June 12, 2025 Featuring practical insights from contributing attorney Richard S. AlembikGetting a foreclosure notice of default from your lender is not the end of the world. While it can feel stressful, this notice is just the start of the foreclosure process. As the borrower, you still have time and options to stop the foreclosure of your home. Learning about your legal options can help you determine the best course of action for stopping the foreclosure.
Legal Options To Stop a Foreclosure
Homeowners have several legal options available to them for stopping a foreclosure. Speaking with a lawyer will be the most insightful, as not everyone will qualify for all options. Factors such as the number of missed payments, the stage of the foreclosure proceedings you are in, and the type of mortgage you have can all impact what you can do.
Generally, lenders are willing to work with borrowers. They would prefer a homeowner to continue making monthly payments rather than have to go into foreclosure and potentially lose money. Unfortunately, many borrowers do not know all of their options for foreclosure prevention. This is why it is so important to work with a bankruptcy lawyer. They can advocate on your behalf with the lender to negotiate a solution that prevents foreclosure.
Richard S. Alembik, a top-rated real estate attorney in Georgia, highlights the importance of addressing the homeowner’s entire financial situation and not just the foreclosure. “If it’s a situation where you have waited to the last minute, and there’s a foreclosure happening the next day, you have no choice but to file for bankruptcy to pause the sale. I work in tandem with bankruptcy attorneys so that they can represent the client from their perspective.”
Mortgage Reinstatement
If the borrower can come up with a lump sum payment, they could pay the total amount overdue plus interest and fees. This would bring the delinquent account up to date and current. The mortgage servicer then agrees to stop the foreclosure proceedings. For this method to work, the homeowner must do so before the foreclosure sale takes place.
Loan Modification
Some lenders will negotiate with the homeowner to modify the loan. The modification is permanent and can apply to one or more terms in the loan. Generally, the goal is to make the monthly payment more affordable by lowering it. The lender may also change the interest rate or extend the repayment period. Most lenders want the homeowner to provide documentation of their financial hardship to approve a modification. They must also show they are able to make the modified payment if approved.
Repayment Plan
Sometimes, a borrower doesn’t need to have the entire loan modified. Instead, they need a repayment plan to help them get caught up on missed monthly payments. The lender will agree to let the borrower make additional partial payments over a set period until they are caught up. To have this arrangement, the lender will want to see that you can afford to make the additional monthly payment.
If it’s a situation where you have waited to the last minute, and there’s a foreclosure happening the next day, you have no choice but to file for bankruptcy to pause the sale. I work in tandem with bankruptcy attorneys so that they can represent the client from their perspective.
Refinancing
Sometimes, a lender is willing to let the borrower refinance their mortgage loan. This replaces your old mortgage with a new one. Ideally, the homeowner would secure better terms, such as a lower monthly payment. The new mortgage would pay the old one, essentially bringing the homeowner current.
This option is limited, though. You need to have sufficient credit, income, and home equity to qualify. Many homeowners are struggling by the time they reach the foreclosure stage. At this point, their credit has declined. Another hindrance is someone who hasn’t had their first mortgage for very long. They won’t have enough equity in their home. Some lenders also require homeowners to be current on their current mortgage before they can qualify for a refinance, which almost defeats the purpose of this solution.
Forbearance Agreements
A homeowner can ask the lender if they are willing to stop or reduce monthly payments temporarily. This is called a forbearance agreement. Typically, this solution works for a homeowner who has experienced a temporary financial situation and needs some time to get back on their feet. The homeowner will need to provide proof of their financial hardship. The forbearance is also temporary, so they will need to resume regular payments when it ends.
Deed in Lieu of Foreclosure
A homeowner can voluntarily transfer the ownership of their property to the lender. They do this through a document called a deed of trust. The lender must approve of this transfer before the homeowner attempts it. There also cannot be any other liens on the property. There is also a catch, when you transfer ownership, you no longer own the home, the lender does. You will have to leave the property.
Short Sale
A short sale is a type of foreclosure sale. It typically happens when the value of the property drops lower than what the borrower owes on their mortgage. The borrower will ask the mortgage lender for approval to sell the home for less than the mortgage balance in order to avoid foreclosure. The borrower needs the lender’s approval and should seek forgiveness of the outstanding balance. Otherwise, the buyer risks still owing the remaining balance on the loan after the sale. A short sale will impact your credit score, but it will avoid having a foreclosure on your credit report.
Bankruptcy
While bankruptcy is an option for stopping foreclosure, it should be considered a last-resort solution. Filing for bankruptcy can have widespread and lasting impacts on your financial situation. Speaking with a bankruptcy attorney will help you understand your options and the effect filing has on your foreclosure.
When you file a Chapter 7 bankruptcy, an automatic stay temporarily stops the foreclosure. In a Chapter 13 bankruptcy, the court will help you reorganize your debts. You will have a three to five-year repayment plan to help you get back on financial track. Your mortgage will be included in this plan. However, you must have enough income to meet the requirements of your repayment plan.
Wrongful Foreclosure Lawsuit
If a homeowner believes that the foreclosure is wrongful, they can halt proceedings by filing a wrongful foreclosure lawsuit against the lender. As part of this process, they will file a temporary restraining order (TRO) or injunction that legally stops the lender from moving forward with foreclosure proceedings until the dispute is resolved. You must have a valid legal argument for why you think the foreclosure is wrongful. These reasons can vary by state. Common examples include fraud, the lender not following statutory procedures, predatory practices, or violating your rights.
Foreclosure Moratorium
A foreclosure moratorium is a temporary suspension of all foreclosure proceedings. They are typically put in place by a government agency or authority. The hold is designed to give homeowners some protection during a time of hardship. The purpose of the moratorium is to prevent a wave of foreclosures on people who are already struggling and, as a result, become homeless. There are several methods for putting a moratorium into place.
- Federal Government Orders
- State Government Orders
- Judicial Orders
- Executive Orders
Alembik stresses that while a moratorium, pause, or another program may provide relief to the homeowner, the terms and conditions can be complicated. Homeowners need to take steps to ensure they know what they are responsible for. “You’ll be expected to catch that loan back up at the end of the moratorium. Moratoriums aren’t very common at all. They stay the requirement to make a mortgage payment but don’t eliminate the payment being due. You still owe the money, but you can pay it later.”
Situations When a Foreclosure Moratorium May Apply
Several situations can lead to a foreclosure moratorium being put in place. An economic crisis, natural disaster, or public health emergency could occur. The most well-known foreclosure moratoriums were during COVID-19. However, moratoriums have also been put in place for regions experiencing the aftereffects of hurricanes, wildfires, tornadoes, earthquakes, and floods. A moratorium could also be put in place if a systemic problem is discovered in the mortgage process. These are typically discovery of widespread fraud or regulatory issues.
Limitations of Depending on a Foreclosure Moratorium
Unlike some of the other legal options on this list to stop a foreclosure, you cannot completely depend on a moratorium to solve all of your problems. A moratorium provides temporary relief but is not a long-term solution. They are temporary in nature, and once they expire, the foreclosure proceedings will resume. The protection under the moratorium is also limited in nature. For example, states put several moratoriums in place during the COVID-19 pandemic. Many of these only applied to federally backed loans and not private mortgages.
Your interest and feed will continue to accrue during the moratorium, pushing you further into debt. Many homeowners find it more difficult to get out of their financial hole after the moratorium ends. There is also no forgiveness for previously accrued debt. You will still owe back mortgage payments when the moratorium ends. There is also no guarantee of eviction. A lender may not be able to foreclose on the house, but it may be able to pursue an eviction.
There is also the mental stress and anxiety you will feel as your foreclosure situation sits on pause. The situation doesn’t go away, hanging like a black cloud over your home. This can have a significant negative impact on your and your family’s mental health.
Foreclosure Mediation Programs
There are state and federal programs that can help homeowners facing foreclosure negotiate with their mortgage company. Some programs provide financial assistance that can help with past-due amounts. Others can award grant money that can be used towards a payment plan. To gain access to assistance, a homeowner would have to apply and qualify. Each state and federal programs vary. Each program typically has a housing counseling agency you can contact for requirements. Once approved for the program, you will work with a housing counselor who will guide you through the mediation process.
How Foreclosure Mediation Programs Work
Generally, the homeowner will initiate mediation when they receive a foreclosure notice. Depending on where you are located, mediation can be an optional or mandatory step in the foreclosure process. Next, a mediator will be selected. It will be an independent third party. While preparing for mediation, the parties will gather documents that can support their position. This will include financial information, payment records, and more. During the mediation session, the homeowner and lender will present their offer to avoid foreclosure. The parties will negotiate a solution with the help of the mediator. Hopefully, the mediation will end with the parties agreeing to a final solution. The agreement will be formalized in a written agreement. In some situations, the parties cannot come to an agreement. With mediation not working, the foreclosure process will continue forward.
Potential Outcomes of Foreclosure Mediation
Every borrower’s situation with their lender is different, so the outcomes can vary just as much. The homeowner and lender could agree to do any of the following:
- Loan modification
- Repayment plan
- Short sale
- Deed in Lieu of a foreclosure
- Temporary forbearance
There is one other possible alternative that no homeowner wants to see, and that is the foreclosure process continuing to move forward. Despite best efforts, no agreement or resolution can be reached to stop foreclosure. The lender will resume foreclosure. If this happens, hopefully, the homeowner has gained insight and had some more time to prepare.
Risk of Scams in Foreclosure Mediation
While several foreclosure mediation assistance programs are available, there are questionable services, too. Generally, you can look for a program operated through the court system or a government agency. You need to be more careful when an independent third party offers mediation services. Signs that the program is more predatory than helpful include requiring payment of fees, false guarantees, pressure tactics, or impersonating a government agency.
You can protect yourself by doing your due diligence before committing to a program. Verify the program independently through an outside source that can validate it. You can contact your local state attorney general’s office, HUD-approved housing counselor, or local housing authority for verification. Refuse to pay any upfront fees. You can also speak with a real estate attorney. They can direct you to official and reputable programs while advising against predatory programs.
Alembik stresses that homeowners should be careful when looking for services to assist them with stopping their foreclosure. That a licensed attorney can provide reliable services. “They [foreclosure mediation scams] would take a whole lot of money from people, a lot more than an attorney would charge for similar services. Nine times out of 10, they really weren’t lawyers or providing a helpful service.”
Consulting with Legal Professionals in the Foreclosure Process
Many homeowners hesitate to hire a foreclosure attorney because they worry about the cost. However, the attorney fees are well worth protecting your home’s much larger investment. When you have a real estate attorney working with you, they can educate you on your legal options for stopping the foreclosure. Their experience can help you create a solid foreclosure defense to give you the best chance at stopping the foreclosure.
Find Experienced Legal Help
Receiving a foreclosure notice from your lender can feel ominous. However, you still have legal options that can help you delay or stop the foreclosure from happening. Working with a foreclosure lawyer can help you understand the legal process. Their knowledge of foreclosure laws can help homeowners navigate the legal landscape. While a lawyer cannot guarantee that they can stop a foreclosure, they can help homeowners make the odds more in their favor.
Visit the Super Lawyers directory to begin your search for an experienced foreclosure attorney.
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