Reinstatement/Repayment Plan

paid_in_fullA reinstatement is the simplest solution for a foreclosure; however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

Benefits
  • Allows the homeowner to make payments over time.
Drawbacks
  • Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed.
  • Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.