Keeps you in the home
Reinstatement: paying the arrears, not the whole loan
This is the option homeowners most often do not realize they have. In most cases you do not have to pay off the entire mortgage to stop a foreclosure. You pay what is actually past due plus costs and fees, and the loan goes back to normal as if it had never been accelerated.
This tends to work when
- You can raise the arrears amount from savings, family, a retirement account or a sale of something else
- Your income has recovered and the monthly payment is affordable again
- You are inside your state's cure window, or your loan documents extend it
This tends not to work when
- The arrears figure is far beyond what you can raise
- The underlying monthly payment was never affordable and nothing has changed
- Your state's cure window has closed and your lender will not accept a late reinstatement
How it actually goes
Ask for a written reinstatement quote
Call your servicer and ask for the reinstatement amount in writing, good through a specific date. Do not rely on a number given verbally. The figure includes arrears plus foreclosure costs and fees, and it changes as costs accrue.
Confirm your actual deadline
State law gives you a floor. Your deed of trust often gives you more. These are different dates and the second one is usually later. Get both.
Pay in certified funds
Servicers generally require a cashier's check or wire. Get written confirmation that the foreclosure has been cancelled, not just that payment was received.
Straight answer