What action allows a borrower to avoid losing their property after defaulting on a loan?

The action that allows a borrower to avoid losing their property after defaulting on a loan is known as equity of redemption. This legal principle grants the borrower the right to reclaim their property by paying off the outstanding debt, including any accrued interest and costs, before a foreclosure sale occurs.

The concept of equity of redemption is rooted in the idea that borrowers should have the opportunity to rectify their financial situation and regain control over their property. This right typically exists up until the moment of the foreclosure sale, enabling borrowers to prevent the loss of their home by settling their obligations.

While other options like loan modification, foreclosure defense, and bankruptcy filing may provide various forms of relief or protection, they do not inherently encompass the immediate right to reclaim the property through payment as equity of redemption does. Loan modifications may change the terms of the loan to make payments more manageable, foreclosure defense may delay the process or contest the validity of the foreclosure, and bankruptcy filing can provide temporary protection from creditors but often leads to additional complexities regarding property ownership.