Patrick Duffy's Real Estate Blog

Foreclosure Alternatives: Reinstatement

In my first of a series of posts on foreclosure avoidance options, we will look at the quickest way to “get back in the good graces” of your lender – reinstatement.  Unfortunately due to the homeowner’s hardship situation, it is often difficult to pursue this route.  However, if the reason you have missed payments is temporary, this option allows you to reinstate your mortgage all the way up until the bank sale.

To have your mortgage reinstated, you quite simply have to pay the lender what they’re owed to bring you current.  In order to due this, you will contact your lender and request the amount needed in the form of a reinstatement letter.  Keep in mind this letter often is time sensitive, usually requiring the full amount in one payment within 3o days.

Once reinstated, go ahead and keep making those payments.

Reinstatement Example
Homeowner misses four payments on a $2000 per month mortgage and the foreclosure process has been started.

Reinstatement Amount

As you can see, this option will often require a sizable lump sum payment.  Due to the difficulty of coming up with that payment, other options may need to be explored – which will be covered in the coming days.  The next foreclosure avoidance option in my series of posts will be Forbearance.

If you or someone you know is falling behind on their mortgage, please contact me at 703-403-0536 / patrick@patrickduffyrealtor.com.  Additional foreclosure information can be found at www.NorthernVaShortSaleHelp.com.