Stopping Foreclosure Through Reinstatement
In situations where a borrower is behind on their mortgage payments, they have the option of paying back all of the arrears and getting back up to date in one payment, called a mortgage reinstatement. Reinstatements are a means of stopping a foreclosure or sheriff sale and becoming current on a mortgage again.
The first step in reinstating your mortgage is to contact your lender. Your mortgage statement will include an address for you to send “Requests for Information.” Send a written request, by certified mail, to that address and the lender is required by law to send you a quote with the exact amount you need to pay to become current again. This amount must be paid in full in one (1) lump sum in order for the reinstatement to be valid. The lender does not have to accept partial payments. According the NJ Fair Foreclosure Act, your lender is required to accept the payment any time before a final judgement of foreclosure is entered, but the final deadline will be up to your lender. Many lenders will allow reinstatement right up to the time of Sheriff Sale.
I Have The Money to Reinstate My Mortgage. Why Won’t My Bank Take It?
Unfortunately, we often see situations where a borrower will secure the money needed for the reinstatement, for example by taking the money from their pension or retirement fund or borrowing from family or friends, and their bank will not accept their payment. This is illegal. If you are trying to get current on your mortgage and your bank will not send you a reinstatement quote, or will not accept your valid reinstatement payment, contact us today. We can help you bring a motion before the Court, or in some circumstances we can help you file a federal lawsuit against the bank. We can also help you explore loan modification options that will let you avoid foreclosure without having to pay all the arrears at one time.
What Should I Do If My Reinstatement Quote is Wrong?
The reinstatement quote that your lender sends you should contain the following information:
- The amount of all due current and back mortgage payments
- Any applicable late fees
- Any applicable property inspection/preservation fees and costs
- Attorney fees and any costs related to the foreclosure process, if it has begun
- A recording fee for the notice of sheriff sale cancellation, if applicable
If your lender has sent you a reinstatement quote and it includes fees that are not applicable or have already been paid, contact us today. We can help you dispute the amount. If the lender demands payment for fees or costs that are not due, it is possible to file a Federal Complaint under the Fair Debt Collection Practices Act (FDCPA).