Bank is going to foreclose on our home, and we have the money now to pay what we owe,?

See a lawyer.

The key thing is to pay the full amount the bank is asking--and that'll include interest and penalties. (Or attempt to negotiate those down or away.) If you do pay whatever the bank requires IN FULL, you should be fine. However, if you only make up the past payments without the additional interest and penalties, then your nightmare scenario could become a reality.

Again: See a lawyer.

Hope that helps.

Talk to lawyer before bank takes your money AND evict you. Worst case scenario is that you lose home, rent elsewhere, credit suffers for 7 years, and have to file potential loss on your taxes (if property ultimately sells for less than original mortgage). Don't give them a dime until you are sure that it will actually help your cause (i.e. stay in home).

It sucks to have a ding on credit score and be forced to rent for awhile, but at least you won't be giving bank money and have them snatch property from you immediately afterwards. You may be able to write off financial loss from foreclosure on next year's taxes if you qualify for selected exemptions from tax liability -talk to tax professional/CPA for this item.

Situation sucks, but you need to think ahead and consider plan B given the history of missed payments.

If you pay in full and continue to pay on time, it should not be an issue.