The possibilities of homeowners finding some way to get out of the foreclosure process before losing the houses are nearly endless. One of the most common methods, of course, is when they recover from a financial hardship fairly quickly and are able to save or borrow the money necessary to reinstate the loan. No payment arrangements are made, and refinancing is not considered; the homeowners simply take whatever savings and income that they have available and send it to the mortgage company, paying off the total amount behind.

But can the lender continue with the foreclosure process, even if the homeowners pay back the total amount behind? The short answer is no, absolutely not. If the former foreclosure victims can make up the payments that they had fallen behind, along with the extra interest, late fees, and other costs, then they will not go into foreclosure. The bank no longer has any reason to pursue the foreclosure process, and the courts would recognize that if the lender's case is challenged.

The bank sues for foreclosure because its clients are in default of their agreement to make the mortgage payments on time for the life of the loan. Once the homeowners have missed several months of payments and the mortgage is in default, the bank can use the courts to enforce the foreclosure laws designed to help them recover the property as payment for the loan. The bank will sue to have the government sell the house out from under the current owners to make good on the owners' commitment to pay the loan or give them the underlying collateral, which is the house itself.

But if the homeowners are not in default any longer, then the bank has no reason to sue them to take over the property. The lender is not suffering any damages, and the owners are not in breach of the contract if they have managed to pay back the missed payments to being current. The payments will have to be accepted by the mortgage company, but there is no legitimate basis for them to send back payment in full of the amount behind. (Of course, that does not stop fraudulent mortgage companies from doing exactly that on a regular basis, but that is not the majority of cases.) It is not only a bad idea from a legal perspective, it is simply bad business not to accept a large amount of money that will bring the loan back to a current status.

Without the homeowners being behind on the mortgage, the bank can not sue them to force the sheriff sale of the house to pay the defaulted mortgage. Saving or borrowing enough money to reinstate the loan is a perfectly acceptable method that homeowners use every day to stop foreclosure on their homes. In fact, this is possibly the most used option, although it is not often reported, because the owners do not seek third party assistance, and the bank may hold off on beginning the foreclosure process if the homeowners have promised that they will be able to come up with the money shortly.

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