Old Antique Clock Today in the United States there are more and more homeowners facing the devastating financial challenge of foreclosure. Many times it can be avoided. Here are some options (Part I.) for foreclosure, along with a short explanation of each. Reinstatement: This option is extremely simple, but the most difficult. The homeowner asks the mortgage company the total amount owed and pays it all, including fines and fees. It does not require approval, and lenders will allow this up to the day before the final foreclosure sale. Forbearance or Repayment plan: This is when a homeowner negotiates repaying their back payments over a period of time. Usually, the homeowner makes their current payment as well as a portion of the back payments owed. Most lenders require homeowners to be qualified for this option. Mortgage Modification: This plan is when either the interest rate of the loan, the principal balance or the term of the loan is reduced. The result is generally a lower, more affordable payment for the homeowner. Homeowners need to qualify for this option and must supply all necessary documentation, while the lender has to be actively pursuing modifications.