Reinstating a mortgage loan happens when a delinquent homeowner brings a loan current in one payment, including late fees, costs, and penalties. While this may seem impossible to some, it actually makes sense to others.
If you have an irregular income, work on commission, or work in an industry that only works certain months of the year, it can be easy to fall behind on your mortgage payments during the slump months. But when work is in high gear, the money is often available; but homeowners don’t realize that they can bring the loan current and make the mortgage lender happy.
Other scenarios include homeowners who were unemployed but recently gained employment, launched a business, or otherwise came into a more gainful financial situation.
If you’ve gotten behind on your mortgage payments, for whatever reason, but now have the income to get caught up, you can request a quote from your mortgage company to determine exactly how much you would have to pay in order to reinstate your loan and stop a pending foreclosure.
The good news is that the foreclosure process is often lengthy, and can sometimes be delayed, which can give you a few months to save up the entire amount needed to get the loan all caught up.
For those who feel that reinstatement is out of the question, or beyond your reach, there are other options, still, for stopping the foreclosure of your home:
- Short Sale – Even after your mortgage lender has issued the Notice of Default (NOD), they still have to consider any sales offers that you receive on the home. By definition, a short sale is going to result in an offer that is less than what you currently owe on the home, but the mortgage company is going to lose money either way. If you find them a reasonable short sale offer, it may be in their best interest to take it because it will save them time and money with the foreclosure process, and then the process of selling it at auction. So, don’t give up on the idea of selling your home before the foreclosure is finalized.
- File Suit – If your lender initiated a non-judicial foreclosure (one in which they didn’t seek a court order before beginning the process) then you may be able to find some relief by filing a lawsuit to challenge the foreclosure. This isn’t an option if you’re simply frustrated with the foreclosure but can be a realistic possibility if you honestly have reason to believe that your lender has made some grievous error. Some mortgage lenders try to cut corners, or ignore certain homeowners’ rights, in the hopes that unsuspecting homeowners won’t know the difference.
This is not an exhaustive list of foreclosure defense options. If you’re not sure which is the best fit for you, or you want to explore all of your options, contact our foreclosure defense and finance experts.
