What is Mortgage Reinstatement?
If a borrower is behind on their mortgage loan payments, they may be in a position to pay back all of the arrears on the loan and become current again in one payment. This is known as mortgage reinstatement, and is a method of stopping a foreclosure or sheriff sale.
In order to reinstate a loan, you must first contact your lender and get a quote detailing the exact amount needed for reinstatement. In order for the mortgage reinstatement to be valid, the amount on the quote must be paid in full. This quote should include:
- The amount of all back payments and current payments that are due
- Late fees, if any
- Property inspection costs, if any
- Any costs related to the foreclosure process, if it has begun
- A recording fee for the notice of sheriff sale cancellation, if applicable
Note that mortgage reinstatement is different from a mortgage payoff. While both are methods to stop foreclosure, a mortgage reinstatement only brings you current with your normal payments, whereas a payoff satisfies the loan completely.
How Long Do I Have to Reinstate My Loan?
The NJ Fair Foreclosure Act requires lenders to allow reinstatement any time before a final judgement of foreclosure is entered. However, lenders will often accept reinstatement payments up to the day of the sheriff sale itself. Ultimately, your final deadline for a reinstatement payment will depend on your lender, but the lender must provide you with a quote when you request one, and must accept your reinstatement payment before a final judgement.
My Lender Won’t Let Me Reinstate My Loan. What Should I Do?
Unfortunately, sometimes situations arise where lenders refuse to provide quotes for reinstatement, or refuse to accept valid reinstatement payments. This is against the law. If your lender will not provide you with a quote, will not accept your reinstatement payment, or if you are having any other problem with your reinstatement, we can help. Contact us today to discuss your options.