Reinstating a Loan

Reinstating a Loan

There are nine ways to stop a foreclosure. Let’s look at the first, reinstating a loan.

Reinstating a Loan 

Nolo says, “A “reinstatement” occurs when the borrower brings the delinquent loan current in one lump sum. Reinstating a loan stops a foreclosure because the borrower catches up on the defaulted payments. The borrower also has to pay any overdue fees and expenses incurred by the default. Once the reinstatement, the borrower resumes making regular payments on the debt.”

Paying off a loan is differentA “payoff” occurs when the borrower pays the total amount required to satisfy the loan balance completely. Paying off the loan also stops a foreclosure.

Reinstating the Loan to Avoid Foreclosure

To reinstate a loan, you must first determine the amount needed to bring the loan current from the lender or loan servicer. You can get this information by requesting a “reinstatement quote” or “reinstatement letter” from the loan servicer. The reinstatement quote will give you the exact amount needed to cure the default, as well as a good-through date for that amount. The amount you’ll have to pay ordinarily includes:

  • all of the back and current payments due, including principal and interest
  • any applicable late fees
  • the cost of any property inspections
  • the attorneys’ or trustee’s fees for the foreclosure procedure
  • other expenses incurred to preserve and protect the lender’s interest in the property, and
  • often, a recording fee for the notice of cancellation of the sale.

 How Long Do I Get to Reinstate My Mortgage Loan?

Some states have a law allowing a delinquent borrower to reinstate the loan by a specific deadline. For example, Nebraska law provides you with one month (two if the property is agricultural) to reinstate the loan after the trustee records the notice of default. (Neb. Rev. Stat. § 76-1006). Also, the deed of trust might give you more time to reinstate. Check the paperwork you signed when you took out the loan to find out if you get more time to get caught up on past-due amounts and if so, the deadline to reinstate. You can also call your loan servicer and ask if the lender will let you reinstate.

Get Help!

How courts and agencies interpret and apply laws can change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you’re facing a foreclosure. In addition, if you have questions about Nebraska’s foreclosure process or want to learn about potential defenses to foreclosure and possibly fight the foreclosure in court, consider talking to a foreclosure attorney.

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