Last updated: November 2005

Reinstatement

Reinstatement occurs when the loan is brought current by paying the total amount past due.  You have an absolute right to fully reinstate your loan within 90 days of being served with a Complaint to Foreclose Mortgage.   However, lenders will often allow reinstatement as long as it occurs before a foreclosure sale.

Repayment Plan

A repayment plan is designed to reinstate the loan.  It is an agreement to bring the mortgage current over time.  The terms are generally a payment of ½ of the arrearage as a down payment and 1 ½ payments a month until the account is brought current.  A lender will normally not accept a repayment plan after a bankruptcy.

Redemption

Redemption is the act of paying off the delinquent loan in full.  You have the right to payoff the loan during the redemption period which, for residential property, expires 7 months from the date of service of the foreclosure complaint or 3 months from the date the judgment of foreclosure is entered, whichever is later.  The redemption period must expire prior to a foreclosure sale.  Redemption usually occurs either through a sale or a refinance of the property.

Home Sale/Short Payoff

You can sell your home anytime before the foreclosure is finished.  A short payoff occurs when you owe more on the loan than the house is worth.  A lender will usually not accept a short-payoff on a refinance.

Refinance

You may possibly refinance the loan if you have enough equity in your home. However, you will pay a high interest rate plus high loan charges.

Loan Modification

A loan modification refers to changing the terms of the delinquent mortgage.  These changes may include extending the term of the mortgage, adding the delinquency to the mortgage amount or a reduction in the interest rate.

Bankruptcy

Filing bankruptcy will stop the foreclosure case.  A Chapter 13 bankruptcy is a type of forced repayment plan.  A bankruptcy can be filed anytime before a foreclosure sale.  For most people, this should be the last option, not the first!

Deed-in-Lieu of Foreclosure

A deed in lieu of foreclosure is a voluntary transfer of the property to the lender in full satisfaction of the amount owed.  By accepting the deed, the lender releases you from personal liability on the loan.  Lenders will not accept a deed in lieu of foreclosure if there are other liens on the property.

Helpful Organizations
The following organizations may be able to help you with foreclosure

For a list of organizations in your area that may be able to help you, enter your zip code.

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