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Understanding mortgage reinstatement

On Behalf of | Dec 23, 2022 | Foreclosure

Missing a mortgage payment can be a frightening experience. Between the time of missed payment to foreclosure, there are options for getting a home loan back on track. For Texas homeowners, one of the options to restore a mortgage once it’s in default is a mortgage reinstatement.

A mortgage reinstatement involves paying the missed payment and all late fees to return a defaulted home loan to good standing.

Starting a mortgage reinstatement

For homeowners able to pay their missing payment and the late fees, a mortgage reinstatement avoids foreclosure. Typically, in the time period of 45 days to 120 days after the missed payment, a lender will send a homeowner a letter of default. This may vary by lender. In the state of Texas, homeowners have 20 days to ask a lender for a mortgage reinstatement. This time period varies from state to state based on local laws.

After the homeowner asks for a mortgage reinstatement the lender will then provide a detailed outline of the payments and fees needed for reinstatement to be possible. With those payments completed, the mortgage will return to its regular payment schedule. Be sure to contact the lender after paying to be sure they received your payments and there won’t be a foreclosure.

Mortgage reinstatement is a final chance

The mortgage reinstatement process is the final chance to avoid foreclosure. If you have a missed mortgage payment, but your home loan is not yet in default, there are other options. Because a mortgage reinstatement includes late fees, it may be cheaper to consider a mortgage loan modification, or possibly a mortgage refinance option. If you have a missed payment but your loan is not yet in default, you can ask your lender about these options as possibilities available to you before your loan defaults.