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Foreclosure processPre-foreclosure

Reinstatement

Also called Loan reinstatement, Curing the default

In short

Reinstatement is bringing a defaulted mortgage current by paying all past-due payments, late fees and foreclosure costs in one lump sum, which stops the foreclosure and restores the original loan.

What you pay
Arrears, fees and costs
Deadline
Set by state law and the loan
Result
Foreclosure cancelled, loan restored
Lifecycle stage
Pre-foreclosure

Where it fits in a foreclosure

Reinstatement belongs to the pre-foreclosure stage.

  1. 1Missed paymentsThe owner falls behind; the servicer sends notices and may offer workout options.
  2. 2Pre-foreclosureA notice of default or lis pendens is filed. The owner can still sell, catch up or negotiate.You are here
  3. 3AuctionThe property goes to a public sale, usually for cash, as-is and often without an inspection.
  4. 4Bank-owned (REO)If no one outbids the lender, it takes the property back, clears most title issues and lists it.
  5. 5ResaleA buyer or investor purchases, repairs and occupies, rents or resells the home.

How reinstatement works

The borrower asks the servicer or trustee for a reinstatement quote, which lists the missed payments, late charges, inspection fees and foreclosure costs to date. Paying that amount by the deadline cures the default. The loan continues on its original terms, and the notice of default or lawsuit is withdrawn.

Deadlines vary

Many states, and many loan documents, give borrowers a right to reinstate up to a point before the foreclosure sale. How long that window lasts varies by state and loan. After the deadline, the owner may only be able to stop the sale by paying off the whole loan, which is redemption.

Where the money comes from

Reinstatement requires a lump sum, often from savings, family, a retirement account or a sale of other assets. Because the amount grows each month as fees accumulate, earlier action costs less. Owners who cannot raise the funds may look at a loan modification or a sale instead.

Example

A reinstatement quote

An owner missed five payments of $1,800. The quote shows $9,000 in missed payments, $450 in late charges, $1,350 in trustee and attorney fees and $200 in property inspection fees, for a total of $11,000. The owner pays the $11,000 before the deadline, the foreclosure is cancelled, and regular $1,800 payments resume.

Reinstatement vs. Right of Redemption

Reinstatement

Reinstatement is bringing a defaulted mortgage current by paying all past-due payments, late fees and foreclosure costs in one lump sum, which stops the foreclosure and restores the original loan.

Right of Redemption

A right of redemption lets a foreclosed homeowner reclaim the property by paying the full amount owed, either before the foreclosure sale or, in some states, for a set period after it.

The differenceReinstatement brings the loan current by paying only past-due amounts and costs. Redemption requires paying off the entire debt, or the sale price after a sale.

Frequently Asked Questions

Related terms

Loan ModificationForeclosure processA loan modification is a permanent change to a mortgage's terms, such as a lower rate, longer term or added past-due amounts, that a lender agrees to so a struggling borrower can afford payments.ForbearanceForeclosure processForbearance is a temporary agreement in which a mortgage servicer lets a borrower pause or reduce payments during a hardship. The skipped amounts must be repaid or resolved later.Notice of DefaultForeclosure processA notice of default (NOD) is a public notice, recorded with the county, stating that a borrower has fallen behind on a mortgage or deed of trust and that the lender may move toward foreclosure.Pre-ForeclosureForeclosure processPre-foreclosure is the period after a lender files a default notice or foreclosure lawsuit but before the property is sold at auction. The owner still holds title and can sell or catch up.Notice of Trustee SaleForeclosure processA notice of trustee sale is the public notice, in a non-judicial foreclosure, that sets the date, time and place a trustee will auction a property to repay the defaulted loan.ForeclosureForeclosure processForeclosure is the legal process a lender uses to take back and sell a property after the borrower stops making mortgage payments, so the lender can recover what it is owed.Short SaleForeclosure processA short sale is the sale of a home for less than the amount owed on its mortgage, with the lender's approval. The lender agrees to accept the reduced proceeds to avoid a foreclosure.Lis PendensForeclosure processA lis pendens is a recorded notice that a lawsuit has been filed involving title to or an interest in a property, such as a judicial foreclosure. It warns buyers that the outcome could affect ownership.

Learn more in the knowledge base

What Is a Pre-Foreclosure? How the Stage Works for BuyersGuide · 7 min readPre-foreclosure is the window between a lender starting foreclosure and the home being sold at auction. The owner still holds title and still has options, so any purchase is a negotiation with the owner rather than a bid or a bank sale. This guide explains how the stage starts, how it ends and how it compares with auctions and bank-owned homes.Approaching Distressed Homeowners Ethically in Pre-ForeclosureGuide · 7 min readHomeowners in pre-foreclosure are under real stress, and they have more options than selling to you. Buyers who are honest, respect those options and follow state rules for distressed-property purchases can make fair deals without exploiting anyone. This guide covers how to do that and which patterns to avoid.Closing a Pre-Foreclosure Before the Foreclosure Sale DateGuide · 6 min readIn a pre-foreclosure, the foreclosure sale date is the deadline that matters most, and a signed contract does not move it. This guide covers how to plan the closing backward from that date, keep payoffs and short sale approvals current, seek a postponement properly, meet state rules at closing and protect yourself if the sale date arrives first.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.