As it was mentioned before, probably going to the seller and asking for an extension or loan modification will be the best way to go about it.

Public notice of pending litigation.60–180+ days before auctionAPPOINTMENT OF TRUSTEE/SUBSTITUTE TRUSTEEMortgage lender assigns (or replaces) a trustee to handle foreclosure.30–120 days before auctionMODIFICATIONBorrower is trying to renegotiate loan terms to avoid foreclosure.Can happen 30–180 days out; often before NODREINSTATEMENTBorrower intends to catch up on payments to stop foreclosure.Usually 0–60 days before auctionBANKRUPTCY PROCEEDINGSFiled by borrower to stop foreclosure.Typically filed within 0–30 days before auctionABSTRACT OF JUDGMENTCreditor has secured a judgment lien — may be precursor to lien enforcement.60–180+ days (depends on collection)County clerk documents like lis pendens, mortgage loan modifications, and similar filings can reveal signs of financial distress in a property.

I advised him to use all means necessary to keep his home (by the time he called me he exhausted all the options , he did two loan modifications and twice defaulted on those , unable to keep up payments).

At the very least, you’ll want to know if modifying ownership without updating the guarantee could trigger issues down the line (like a default clause).If avoiding a full refinance is the main goal, maybe check if your lender would consider a partial assumption or internal modification.

A $35k house in today's market screams war zone area, super rural with limited demand, or almost falling over (necessitating far more than $20k of renovation). 

Quote from @Hector Chavarria: I got a property loan 400k, house value 390kbehind and currently on trial for house modificationrent in the area $2,600 a month looking for rental or exit strategyTrial ends Octobercurrent monthly mortgage payment $3,300 vEstimated new monthly payment after modification trial $3,029 includes HOA, Tax and InsuranceAny advise will help.That $300 modification is only useful if you have reason to keep the property for 10 years or more.

My other modifications from The Oracle of Omaha's advice is diversification via "O" and "GLD".

While your value added is in the physical aspect of real estate (building SFR, developing subdivisions, etc) our emphasis is on deal structuring (loan modification, wrap mortgages, interest rate arbitration, real property consolidation, tenant repositioning, etc.). 

And, the reality is a loan modifications isn’t always as straightforward or even beneficial as you might think.

I’m looking for practical advice on how to resolve this—whether it’s pushing the lender to amend the structure or negotiating a modification—so I can get the loan I thought I was signing.