There are three ways that I know of and have helped homeowners with in the past to get a home back after the bank has completed foreclosure proceedings and sold the house at auction. I am sure there are more options available, but these different methods have worked for us many times in the past and can work for you if you are attempting to get a home back after losing it.
The first and most straight-forward way is to buy your home back during the redemption period. The redemption period is a time after foreclosure where the court will allow you to buy your home back. The lender can not sell the home during this period and in many cases, you can remain in the home during the redemption period. Redemption is not available in all states or circumstances, but if you are allowed a redemption period, you may buy the home back by paying the balance due on the loan, along with the total arrears (total missed payments and fees). In a few rare cases, we have seen lenders willing to reinstate the loan during the redemption period, if the homeowner is able to pay the total arrears.
If there is no redemption period under state law, you may be able to work out a solution before the sheriff sale is confirmed by the local courts. In general, there is a five day period (varies by state law) after the sheriff sale before the sale is confirmed. If you are able to pay the arrears during this period, the sale can be stopped or reversed.
Of course, the trouble is finding sufficient funds to purchase the home back. Some ideas on how how to find money during the redemption period or before the sale is confirmed are listed here to get you thinking. Sell off all belongings, including retirement accounts, life insurance, cars, campers, and so on. Find second or third jobs and have everyone in the family contribute. Rent out a portion or bedroom of the home or property. Borrow money or get a new loan if you still have enough good credit and a down payment to qualify for a new loan. Ask family members, friends, co-workers, bosses, and relatives for donations or personal loans to get the house back.
To get a loan from a traditional foreclosure lender, you will need to come up with 35% down, so if you have a $200,000 payoff, you will need to raise $70,000. This seems like a lot of money, but any equity you have in the home will count towards the $70,000, so it may not be that hard if property values have remained somewhat stable during the time you bought the house and went into foreclosure.
Also, you may also want to try and negotiate with your lender and get them to reinstate the loan during the redemption period. Not all mortgage companies will agree to this, of course, but it is worth the extra effort if your financial situation has recovered to the point of being able to make a reasonable monthly payment. If you can raise the money to pay the arrears, this may be an option. However, you may need to hire a professional negotiator to help make this happen.
Your second option to get the house back is to have your sheriff sale reversed. In many cases, there are legal discrepancies or rules your lender did not follow. With a good attorney, who is familiar with the foreclosure process, you can use the law to your advantage. Once the sheriff sale is reversed, your lender will start again, correcting their mistakes, so act fast and raise the money needed to get your home out of foreclosure completely. This is only a temporary solution, obviously, but it can give you the time you need to put together a longer-term plan.
Finally, you can consider the use of a private investor or friend or family member to buy the home from the bank after foreclosure. Technically, this should be done at the sheriff sale, or after the sale when the lender is selling the home, but there are many options that would allow the home to be sold before the foreclosure, or even with a short sale, to another party. The purchasing party could, in-turn, sell the home back to you. This could be through a new mortgage, if you qualify, or with a lease or buy-back agreement. Either way, you now have possession of the home and can obtain ownership at a time when your credit has improved. You need to be careful when doing something like this, because there are rules and laws you must be aware of. We highly recommend using a professional agent or someone who specializes in such deals to attempt this option.
If you have already lost your home to foreclosure, there is still hope! Just choose one of the three methods above and find an attorney or trained foreclosure specialist to help you carry out the steps needed to reverse your foreclosure or get your home back after the process has ended. If you have a solution that will allow the bank to end up with their money and you end up with the property, it may be worth pursuing such a mutually beneficial solution for the banks and your family.