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"I have been told by a friend that if I have a signed contract, and present it to the court (or mortgage comp) that will stop the foreclosure procedure?
Court? No. A court will not help you if you have a sales contract unless you are in an active bankruptcy and the lender is trying to get the automatic stay overturned. Mortgage company? Yes. The bank actually does not want your house. They want your money. So if you have a signed contract with a realtor and make every effort to sell your house usually the bank will instruct the foreclosure firm put a hold on the process. But take note of a few things:
-Banks are aware that people do this to stall and they will verify and give you a deadline to sell your house.
-They will usually reject it if you try "for sale by owner". Again, they look at that as a stall tactic and think you are not serious
-They will look at your local market. If things are slow they will be less willing to stop the process.
-This is going to be a long process to get this approved. You are going to be on the phone constantly because your bank may not have a department dedicated to this and there is no direct line to the decision maker. You are going to leave constant messages until the right person eventually gets your message and return your calls. I would write emails and letters too.