In essence, a foreclosure is the transfer of title of real property from a purchaser to a lender. This mechanism is not used frequently, because a bank does not want the houses and because it is not probable they will recover all of the money they are owed through a foreclosure sale. However, foreclosures do happen with some regularity, in part due to the size of the real estate market.
Depending on the reason for the foreclosure, there are different things a purchaser can do. For example, if the violation of the mortgage is the failure to provide tax returns, then simply providing the information can cure the violation.
More likely, the problem is non-payment of the debt under the mortgage. In situations like this, multiple people can cure the violation, including the purchaser or a bank holding a second mortgage.
The cure of non-payment is by providing payment to bring the mortgage current. For example, if a foreclosure is being pursued against a property where non-payment has occurred for six months, providing six months payment should cure the violation. Depending on the state, the cure for non-payment may also involve payment of interest.
Also, depending on the state, there may not be the ability to partially cure the violation. In Colorado, the rule is that default is either “cured” or in “default.” There is no “partially cured.” This will be a bigger problem the longer non-payment occurs. Bringing a mortgage current will be easier if one month is missed, whereas missing a year of payments could render cure highly improbable.
Finally, make sure to read the mortgage carefully. As a matter of contract law, there is a valid and binding clause called an acceleration clause. An acceleration clause changes the way payment of the contract is made. In response to the continued non-payment, the acceleration clause makes every payment under the contract immediately due and payable. There is no right to cure under an acceleration clause in Colorado and the effect removes the process from the foreclosure proceedings.
Foreclosure is governed by the statutes of the states. There is a different process depending on a variety of factors because of the variation between the states.