After Foreclosure, What’s Next?

Few things in life are more difficult than dealing with the process of foreclosure. Neither party wants to have to engage in a foreclosure but lenders have to protect their investment in any way they can so sometimes it is an inevitability if the mortgage isn’t getting paid in the agreed fashion.

So what comes after foreclosure? There are a number of different outcomes to the process, some of which are surprisingly positive considering the circumstances. This guide will give you a rough idea of what to expect.

Paying Off The Foreclosure Note

In the absolute best case scenario the homeowner will be able to pay off the foreclosure note before the process gets any further. This is the ideal solution for both parties as it allows the homeowner to keep the house while also satisfying the lender in regards to whether they think the mortgage will be paid properly.

Be wary of paying of this debt through options such as bank loans or other lending services. Homeowners may wind up with a loan that is even more difficult to pay as a result of the measures they take to pay off the foreclosure note.

Selling the Home

If it simply isn’t feasible for you to pay off the debt the option to sell the home always remains. This can be done by the seller or by the bank, should they take possession of the property.

This is a tricky option as there is a lot to consider before making the sale yourself. If the homeowner still owes more on the mortgage than they have paid then they will still be liable for that debt unless they can convince the mortgage lender to take a lower payment.

Furthermore, if the sale of the house doesn’t satisfy the debt for some other reason the bank will continue chasing the former homeowner for the rest of the money, with the remaining debt continuing to gain interest in many cases.

In the case of auctioning the house, the bank will take control of the property and will look to sell it to the highest bidder. They will then get all of the deeds and everything else relating to the home. In some cases it may be possible to allow somebody to purchase the property and rent it from them, but this usually relies on personal negotiation and the ability to prove that you would be able to pay the rent on time.


Bankruptcy is the most unpleasant option on the list but it can be used when the foreclosure process has been started. By declaring bankruptcy you can stall a foreclosure by months, which may give you the time to save up enough money to pay off the debt and keep the house.

Bear in mind that declaring bankruptcy can have devastating effects on your personal and business life. It will become very difficult to get another loan and there is no guarantee that you will be able to save the property. This should be a last resort and even then it may be wiser to consider selling the house.