If you’ve fallen behind on mortgage payments but are ready to pay back everything you owe, you may be ready to reinstate your mortgage.
Mortgage reinstatement means that you have enough money to fully pay back ALL the missed payments you owe and any additional late fees the bank has charged.
Reinstating sounds straightforward. You would think that the banks would make it easy for you to reinstate but it often can be challenging to complete the reinstatement process, especially if you’re already facing foreclosure.
Here are the main challenges you are likely to face:
- There are multiple parties involved. If you’re facing foreclosure, you likely have a Trustee or Foreclosure Attorney’s office involved in the transaction. The Trustee works with your lender to determine the reinstatement amount so you now have two parties involved instead of one.
- The Trustee produces the reinstatement quote (and adds the foreclosure fees and costs) but the lender gives them the delinquent payment amount. The Trustee and the bank are responsible for calculating different parts of your total reinstatement number. This requires them to communicate with each other which can create confusion and time delays.
- Reinstatement Quotes expire quickly (sometimes as often as every 15 days). As time passes, the amount of money you have to pay to reinstate your loan continues to go up. It would be convenient if Trustees could issue reinstatement quotes for long periods of time but they don’t. Some Trustees issue reinstatement quotes that only last for 15 days before the amount changes. You cannot reinstate your mortgage unless you are reinstating based on the number provided in an unexpired reinstatement quote, so it’s easy to get trapped in a cycle of expiring quotes, making it difficult to ever have a valid quote for more than a few days.
- It can be hard to know whether your Trustee is actually working on preparing your quote. Some Trustees have great communication systems, some do not. If you’re inching toward foreclosure and have requested a reinstatement quote, you may not hear anything back for several days, creating a sense of discomfort and stress as you start to wonder whether or not your request slipped through the cracks.
- The reinstatement quote may not always include detailed payment instructions. Some reinstatement quotes may not always provide detailed information about how the Trustee (or lender) wants to receive the funds. Each reinstatement procedure is different – some lenders want the funds sent to them directly. Others want you to give money to the Trustee. Some want it in the form of a certified cashier’s check. Others want it wired or overnighted to a specific address. Sometimes, the reinstatement quote gives multiple options for payments but it’s hard to know which one is the safest choice to make.
- Once you reinstate, it can be hard to know if it worked and if your foreclosure was cancelled. There aren’t always systems in place for someone to notify you from your lender or your Trustee if your payment was received and your loan reinstated correctly. Sometimes, it feels like you’ve just sent a large sum of money and then everything goes quiet. This can be unnerving.
- Once you reinstate, it can be hard to know the amount and due date of your next regular payment. Once the reinstatement is complete, you should be ready to just resume making regular mortgage payments but the banks can be slow in getting an updated mortgage statement together so it can be confusing to know when you’re supposed to start paying after your reinstatement.
Since reinstating your mortgage often involves the transfer of a large sum of money, it may be in your interest to retain some assistance with the reinstatement process so that everything goes smoothly.
If you’re unable to get some help:
- Make sure you don’t send money until you’ve been told (in writing!) exactly how much is owed
- Make sure you know your reinstatement deadline so you don’t wait too long to reinstate
- Make sure you don’t send money until you’ve been told (in writing!) where the lender, Trustee, or foreclosure attorney’s office wants you to send the funds
- Make sure you’ve reviewed the reinstatement number and the breakdown of all fees charged so you don’t overpay
- Make sure you continue to track your reinstatement funds until you receive confirmation that your loan has been deemed “current” and ALL foreclosure / default activity attached to your mortgage has been cancelled by the lender
- Make sure you continue to follow up with your lender until you start receiving regular mortgage statements that reflect your regular monthly payment amount
If you would like to discuss your reinstatement concerns or get help, feel free to call me at (425) 654-1674.