Whether you’re going through a judicial or nonjudicial foreclosure, you might be able to delay the process by using one or more different tactics, like applying for a loan modification or taking advantage of a state mediation law. A delay might provide you with sufficient time to work out a way to avoid foreclosure or figure out a solution to the problem that caused you to fall behind on your payments in the first place. If you can’t derail the foreclosure permanently, you’ll at least get some extra time to live in the home while you save up to move elsewhere.
A few potential strategies for delaying a foreclosure include using the maximum time allowed when challenging the foreclosure in court, submitting a loss mitigation (foreclosure avoidance) application, participating in mediation, and filing for bankruptcy.
You can delay a foreclosure by challenging it in court—either by filing an answer in a judicial foreclosure or filing your own lawsuit to stop a nonjudicial one. You must have some legal basis or defense for fighting the foreclosure, like you think the servicer didn’t send you a required foreclosure notice or is charging you improper fees. Servicers and lenders often make errors during foreclosures. If the servicer made a significant mistake, a court might even force it to start over from the beginning, delaying the process even more.
Judicial foreclosures. If your foreclosure is judicial, it’s easier and less expensive to jump into the existing lawsuit than it is to challenge a nonjudicial foreclosure. You’ll probably need to get help from a foreclosure lawyer to figure out if the servicer made an error in the procedures, or violated the law, as well as to help raise any issues in court. While some people choose to file an answer to a foreclosure complaint “pro se” (without a lawyer), most people will need a lawyer to help properly file an answer and effectively handle the entire case. (Learn how long you might be able to delay a foreclosure by fighting it in court.)
Nonjudicial foreclosures. If you’re facing a nonjudicial foreclosure, you’ll most likely need to hire an attorney to help you initiate a lawsuit to challenge the foreclosure.
Under federal mortgage servicing laws, if you submit a loss mitigation application to your servicer after foreclosure starts—but more than 37 days before a foreclosure sale—the servicer can’t ask a court for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
Some states also have a law that prevents a foreclosure from going forward if the borrower submits a loss mitigation application.
Just applying for a foreclosure alternative probably won’t buy you a lot of time though. Generally, under federal law, the servicer must review your application within 30 days and can proceed with the foreclosure when any of the three conditions mentioned above is satisfied. Also, the servicer doesn't have to review more than one loss mitigation application from you (unless you brought the loan current after submitting your previous application), so if you previously applied, like during the 120-day preforeclosure period, an additional application won’t stall the foreclosure. But if you qualify for a modification, the foreclosure will end so long as you make all payments under the modified agreement.
You probably don’t need an attorney to submit a loss mitigation application. If you need assistance, a HUD-approved housing counselor can help you for free. (To learn when you might want to consider hiring an attorney to help you with a modification, see Should I Hire a Lawyer to Help With My Mortgage Modification?)
Several states and local court systems have set up foreclosure mediation programs that offer settlement conferences and mediations for people in foreclosure. Usually, these programs involve setting up a meeting between the servicer, the borrower, and a neutral mediator. The parties get together and try to resolve the situation. Generally, the foreclosure stops while mediation is ongoing. You don't have to hire an attorney to represent you in mediation, but you may use one if you want an advocate in the process.
You can stop a foreclosure in its tracks—at least for a while—by filing for bankruptcy. Filing for Chapter 7 bankruptcy will stall a foreclosure, but usually only temporarily. You can use Chapter 7 bankruptcy to save your home if you're current on the loan and you don't have much equity. Otherwise, you'll just be able to delay a foreclosure by a few months, unless you're able to modify the loan. (For more information, see Can I Modify My Mortgage in a Chapter 7 Bankruptcy?)
If you want to keep your home, a Chapter 13 bankruptcy could be a better way to go. Chapter 13 bankruptcy lets you pay off a mortgage "arrearage" (late, unpaid payments) over the length of the bankruptcy plan, which is usually three or five years. (If you’re also thinking about applying for a loan modification, read about Can I Modify My Mortgage in a Chapter 13 Bankruptcy?)
To find out if filing for bankruptcy might be right for you, consider talking to a bankruptcy attorney.