Missed Mortgage Payments And Reinstatement

Last updated on: May 24, 2022


There are several ways in which a homeowner can seek to keep his home before a foreclosure sale is complete.  While some of these methods, such as reinstatement, are legally required to be offered to homeowners in some states, Florida law does not mandate a mortgage servicer to allow reinstatement of mortgages as a way to avoid foreclosure.  However, each homeowner should find out if this is a right available to their under his mortgage agreement, or if their mortgage servicer is willing to work with them.

Reinstatement usually involves the payment of any missed payments, plus costs and fees, in one lump sum in order to get up to date on a mortgage and avoid foreclosure.  While this may seem like an impossible thing for a homeowner who is already behind on payments, for those with an expected financial windfall, it can be a good option if the homeowner wants to avoid foreclosure or a foreclosure sale. If filing for bankruptcy, a homeowner can also seek to cure and reinstate a mortgage loan as long as the certificate of sale has not been issued to the new owner by the clerk of the court at the end of the foreclosure sale.

A reinstatement is different from a payoff of the mortgage.  If a homeowner does a payoff, they pay the balance of the mortgage in one payment, and they no longer owe any money on it.  The reinstatement only pays off past dues costs and fees, and restores the homeowner to being current on his mortgage.  Once current, the homeowner can continue making on time payments for the life of the loan.

It is often a good idea to combine reinstatement with forbearance, whereby the bank agrees to reduce or suspend the mortgage payments for a period of time.  The homeowner can request forbearance once they realize they will begin to miss payments, and then reinstate the missed or reduced portion of the payments made in forbearance when things are better financially.  Forbearance is usually offered for a short period of time.

In order to know exactly how much is needed to reinstate, the homeowner should contact the mortgage servicer and obtain a letter with the specifics of the required amount.  The amount of the mortgage balance is not the amount that is usually required, neither is it the sum of the missed payments alone.  A homeowner can dispute the amount the mortgage servicer quotes as the reinstatement amount if they believe that the quote is wrong. If a homeowner attempts to reinstate with a lower figure, it is not likely to be counted as a reinstatement, and any pending foreclosure process will proceed.

Let Us Assist You

If you are going through foreclosure and are seeking to stop the process and keep your home, you may have a mechanism to do so through reinstatement, if you are have the funds to get current on your payments.  For more information on reinstatement and foreclosure defenses that may help you keep your home, contact an experienced North Miami foreclosure attorney at the Charlip Law Group, L.C. for a consultation.

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