Foreclosure refinancing falls into several camps. Depending on your financial situation, you have several options.
First, if you got behind on your mortgage due to some external situation which has resolved (ie. loss of job, medical problem, etc. ), you can sometimes convince the bank that they should refinance the amount past due and allow you to pay it over a short period of time.
For instance, if you missed four $2500 payments, you may be able to pay the $10,000 over 24 months plus interest. That would be an additional monthly payment of $455 per month for two years.
If paying an additional amount is impossible right now, another way to do a foreclosure refinancing is to have the amount owed tacked on to the end of the loan. In this case, you would pay four months beyond the “payoff" date.
A loan modification can also be worked out where you pay the additional amount across the entire mortgage term.
Note that the bank will only work out a loan modification once. So, before you go for bank foreclosure refinancing, you need to have a plan decided upon.
If your bank can't or won't work with you, another foreclosure refinancing plan is to borrow the money as a second. You can only do this if you have equity in the home, but it may be a good solution if you do. Home equity lines of credit are an example of this option.
Another option is to have someone purchase the home with the upfront agreement that you will lease it back. If you do this, you may choose to have a clause allowing you to buy back the home at some specified time. If you choose this foreclosure option, you should have an attorney review the contract so that you know what you're getting into.
If you're considering any type of foreclosure refinancing, you owe it to yourself to get the free Foreclosure Survival Guide . This new (2008) report reviews the process of foreclosure and details the options homeowner have to either save their house or get out of it as gracefully as possible.