WHAT IS A REINSTATEMENT AND CAN IT STOP A FORECLOSURE?

Reinstatement occurs when a homeowner brings their delinquent loan current in one lump sum payment. The reinstatement stops the foreclosure, because the homeowner has caught up on all the defaulted payments. It is important to note that when reinstating a loan, the homeowner must also pay any overdue fees, court costs, and expenses related to the foreclosure. Once reinstated, however, the homeowner gets back on a regular mortgage payment schedule and the foreclosure case is dismissed. One caveat is that homeowners will not be able to exercise the right of reinstatement again until at least five years after the dismissal date of their original foreclosure case.

What is the deadline for reinstatement?

The deadline for reinstatement is 90 days after service of the foreclosure notice. The homeowner will need to request a quote from the lender for the total amount that must be paid to reinstate the loan. In the event the homeowner disagrees with the reinstatement quote, they can send a notice of error disputing the amount. Once you have met the requirements for reinstatement, the foreclosure case will be dismissed.

What about a redemption?

Homeowners in foreclosure have one other option to pay off their loan in full -- a "redemption." For example, let's say a homeowner is able to refinance with another lender, or receives a personal loan/gift from a family member or friend. The deadline for redemption is typically seven months after the date a homeowner is served with the notice of foreclosure. Just as with a reinstatement, the homeowner will need to request a quote from the lender for the total amount that must be paid in full (including principal of the loan, late fees, interest, and expenses related to the foreclosure).

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What if I can't afford a reinstatement or redemption?

If you are unable to afford the lump sum payment to reinstate your mortgage, you still have options to avoid foreclosure and/or save your home. One option is that the lender may be willing to work with the homeowner and instate a payment plan.

If you would like to learn more about reinstatement or other options, an experienced attorney can help you navigate the process. At The Law Center, we are a team of specialists that are passionate about the foreclosure process from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

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