Please watch this brief video: How to Stop a Foreclosure/Auction — 5 Real Options Explained (Including Bankruptcy Pros & Cons).
Facing Foreclosure? Here’s What You Need to Know
At KarmaExit, we understand that falling behind on your mortgage can feel overwhelming. But the truth is, you still have options—and the earlier you act, the more power you have to protect your equity, your credit, and your peace of mind.
We’re not here to pressure you. We’re here to empower you with knowledge and real solutions. Whether your goal is to stay in your home or exit with the most cash possible, here are the 5 main paths available to you right now:
1. Reinstate the Loan
If you’re able to pay the full amount you’re behind on (including late fees and legal costs), you can bring your mortgage current and stop the foreclosure process. This is often the fastest and cleanest solution. If you have access to savings, family help, or hardship funds, this allows you to keep your home and protect your credit.
2. Loan Modification
A loan modification adjusts your mortgage terms to make payments more affordable—like extending your loan term or reducing your interest rate. It typically takes around 45 days to complete, so if you still have time and haven’t explored this yet, it’s worth considering.
You don’t need to pay thousands to a third-party company. While KarmaExit doesn’t provide legal or financial advice, we can guide you in the right direction so you can do it yourself, for free.
3. Bankruptcy (Chapter 13)
Filing for Chapter 13 bankruptcy can legally pause the foreclosure process. This gives you time to restructure debts and catch up. However, this option should be approached with caution.
In many cases, if you don’t qualify for a loan modification, you may not succeed with Chapter 13 either—and it could leave you with both foreclosure and bankruptcy on your credit report. We are not attorneys and strongly recommend speaking with a qualified bankruptcy lawyer before considering this route.
4. Sell Your Home (Cash or Concierge Sale)
If keeping your home is no longer an option, selling before the auction may be the smartest and most respectful way to exit.
- Cash Sale – We (or one of our trusted partners) can purchase your home quickly—often within 7–14 days. While most investors offer just 60–65% of your home’s value, we often offer closer to 70–75%, giving you more at closing.
- Concierge Sale – this method requires at least 45 days to complete, we can help postpone the sale, then market your home to our network of over 15,000 investors, as well as retail buyers through MLS, Zillow, and Redfin. This strategy helps you get closer to market value.
The earlier you act, the better the outcome.
5. Subject To (Creative Financing)
This option may allow you to avoid foreclosure while still preserving a portion of your home’s equity—even if you don’t have the time or means to sell traditionally.
Here’s how it works:
We take over the responsibility for making your existing mortgage payments—this is what’s known as purchasing the property “Subject To” the current loan. In most cases, you would transfer the title, and we would bring the loan current, preventing foreclosure and avoiding damage to your credit.
In some cases, you may receive a small amount of cash at closing, and the remainder of your equity—if any—is paid to you over time. This is typically done through a promissory note or recorded agreement, all handled through a licensed title company and with attorney-reviewed documentation to protect your interests.
While this structure helps us cover costs and earn a return, our goal is always to ensure that the homeowner walks away with dignity—and whenever possible, with equity intact and foreclosure avoided.
This option isn’t for everyone—but for the right situation, it can be a powerful alternative to losing your home at auction or walking away with nothing.
To qualify for this option:
- Your reinstatement amount must be reasonable
- Your interest rate should ideally be under 5%
This is a powerful strategy if you’re short on time, have little cash, and still want to walk away with dignity and full equity recovery. We’re happy to help you explore whether this could be a fit for your situation.
Let’s Talk
If you’re ready to explore your options or just want to ask questions, contact us today. We’re here to listen, guide, and support you.
Contact KarmaExit Today
Schedule a call today!
Email: Hello@karmaExit.com
Disclaimer:
KarmaExit is not a law firm, and we are not attorneys or licensed financial advisors. The information we provide is strictly for educational and informational purposes only. Nothing shared by KarmaExit, in any form, should be considered legal, financial, or tax advice.
Before making any decisions regarding foreclosure, bankruptcy, selling your home, or any related matter, we strongly recommend that you consult with a licensed attorney, financial advisor, or other qualified professional in your state.
Real estate transactions—especially those involving foreclosure or creative financing—can carry legal and financial consequences. It is your responsibility to seek the proper professional guidance to protect your rights and interests.