One way to get back on track and reverse the foreclosure process on your home is through mortgage reinstatement. Mortgage reinstatement gives borrowers a second chance to keep their home and restore their mortgage loan. Most people believe that when they default on their mortgage and the home goes into foreclosure, there is no option left. Lenders agree to a mortgage reinstatement easier than most borrowers assume, but it will require you to regain control over your financial situation.
Going Into Foreclosure
The housing market received a large hit from the recent economic recession, and millions of Americans have felt it. While the housing market is in recovery, the effects of the recession can still be felt today.
When you stop making mortgage payments or fall behind, the lender will charge you some penalty fees and issue a warning. If you still can’t pay your mortgage, the mortgage goes into default, and you risk losing your home. You will then receive another letter from your lender, which will explain what will happen to your home. The lender will ask you to pay the entire remaining mortgage balance immediately, or they will start the foreclosure process.
The lender files the required documents with your local court, which will rule in their favor if you don’t do anything to remediate the situation. When the court rules in the lender’s favor, your house will go into foreclosure and can be auctioned off and sold.
Reinstating Your Mortgage Loan
Losing your home to foreclosure is the worst case scenario, but fortunately there is something you can do. Regaining control over your budget and being able to get back on track will allow lenders to reinstate your mortgage loan. Foreclosures can take several months to complete, giving you time to work something out and regain the ability to make your mortgage payments.
Getting your home out of foreclosure is going to be expensive, and it all starts with you taking care of all the penalty fees that have been adding up since you stopped making your mortgage payments. Consulting your lender is very important, because your lender will be the most qualified person to tell you what you need to do in order to achieve reinstatement. Your lender will most likely avoid evicting you from your home and do whatever possible to keep you in your mortgage.
Your lender will have the power to modify your mortgage loan to fit your budget and even give you a lower interest rate, which will lead to a lower monthly payment. If you can prove to your lender that you can start making mortgage payments on time each month again, they will most likely work with you to reinstate your mortgage loan.
Reinstating your mortgage loan is an easy way to get you back on track with your mortgage and avoid losing your home, but it all depends on your ability to come up with a budget that will allow you to start paying your mortgage again. Losing a home is not easy and will most likely lead to a lot of stress, or even depression, but as you’ve read in this article, all is not lost when your home goes into foreclosure. Mortgage reinstatement is a viable option for those who are able to get their finances back on track.