Here’s the truth most lenders won’t tell you:

You can’t refinance out of foreclosure unless you’re current.

If there’s a Lis Pendens (foreclosure lawsuit) recorded against your property, you won’t qualify for a new loan. Period.

Refinance sounds great on paper. But unless you’ve already cured the default, it’s not even on the table.

Let’s walk through what actually has to happen—and when refinancing makes sense (and when it doesn’t).

First: Refinance ≠ Bailout

Some people think refinancing is a magic escape route. It’s not.

To refinance:

• You need to pay off the arrears
  
• You need to clear the foreclosure lawsuit
  
• And you need to re-establish creditworthiness
  

In other words:

You need to fix your mortgage first. Then you can refinance.

What Makes Refinance Possible

If you’re in foreclosure, refinancing is only possible if:

✅ You bring the loan current through reinstatement (lump sum payment)

✅ The Lis Pendens is released or dismissed

✅ You’ve recovered your income and stabilized financially

✅ Your credit isn’t completely shot

✅ You still have equity in the home

✅ You’re early enough in the timeline (before a sale date is set)

If you haven’t cured the default, lenders won’t even consider a refinance application.

Foreclosure = automatic disqualification.

What You’ll Need (If You Can Refinance)

• Credit score typically above 600–620 (depending on lender)
  
• Documented income that meets DTI guidelines
  
• Equity in the property (at least 10–20%)
  
• No other judgments, liens, or lawsuits clouding title
  
• A clean title with no active Lis Pendens or public foreclosure filings
  

If you have any of the above unresolved, a refinance is off the table.

“Can I Use a Refinance to Pay Off the Foreclosure?”

Only if you’ve already:

• Cured the default, or
  
• Have a co-borrower or partner with clean credit to apply in their name, or
  
• Work with a hard money lender using just the property’s equity (very risky)
  

Most conventional lenders won’t touch a file with:

• A foreclosure case in progress
  
• Missed payments in the last 6–12 months
  
• Credit scores under 620
  

High DTI or unstable income

Private Lenders: The Risky Plan B

Private or hard money lenders will sometimes lend despite the foreclosure—but:

• Expect high interest rates (10–14%)
  
• Expect points and fees
  
• Expect short payoff terms
  
• Expect balloon payments
  
• Expect strict exit timelines
  

This isn’t a solution. It’s a last-ditch delay tactic.

If your income hasn’t recovered, you’re just buying time to sink deeper.

When Refinancing Might Work

✅ You cured the foreclosure already

✅ You have steady income and good credit

✅ You’re early in the timeline and title is clear

✅ You’re working with a smart broker—not just hoping

If you don’t check all of those boxes, focus elsewhere.

Better Alternatives (If You’re Not Current Yet)

If reinstating isn’t an option, refinancing isn’t either.

Here’s where to look instead:

• Loan Modification – doesn’t require new loan or perfect credit
  
• Repayment Plan – stretch out the arrears over time
  
• Sell the Property – clean exit, protect your equity
  
• Bankruptcy (Chapter 13) – stop the sale and repay over time
  
• Short Sale or Deed-in-Lieu – if you’re underwater or out of time
  

All of these require less than what refinancing does—and often move faster.

Bottom Line

You can’t refinance out of foreclosure if you’re still in it.

If you haven’t brought the loan current and cleared the Lis Pendens, no lender will touch you.

Refinancing isn’t a lifeline—it’s a reward for already fixing the problem.

Want to Know If You Qualify?

We’ll break down your exact situation and tell you the truth—no fluff, no sales pitch. If refinance is off the table, we’ll show you what’s actually available.

📞 Call or Text: (312) 825-1212

🌐 Visit: www.alliedacquisition.com