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Everyone knows that part of life involves paying bills. If you are a homeowner, you likely have plenty of other bills aside from the bill for your monthly mortgage payment. Sometimes, other bills arise that were unanticipated, such as medical bills resulting from an unexpected injury and recovery time in the hospital. Unanticipated bills may create a temporary financial strain that causes you to fall behind on other bills, such as your mortgage payment. Whatever the reason for initially falling behind on your mortgage payment, it is extremely important to bring your mortgage loan account current again as soon as possible to avoid your mortgage lender filing a foreclosure lawsuit against you. Even if you are unable to bring your mortgage loan account current again before the mortgage lender files a foreclosure lawsuit against you, you still have the opportunity to bring your mortgage loan account current and thereby have the foreclosure lawsuit dismissed.
You may immediately reinstate your mortgage loan account by paying the mortgage lender the total past-due amount in full. Sometimes, however, you may not be able to pay the past-due amount in one lump sum, but you still wish to catch up on past-due payments and keep your home from being foreclosed. If this is your situation, you may be able to negotiate a reinstatement repayment plan with the mortgage lender.
The mortgage lender is not required to give you a reinstatement repayment plan, but the mortgage lender may be willing to work with you if you propose reasonable terms for a requested reinstatement repayment plan. For mortgage lenders that are open to giving reinstatement repayment plans, most reinstatement repayment plans are only for a few months (such as 4 to 6 months) and, even with the most cooperative of mortgage lenders, typically never more than 12 months.
If your mortgage lender is willing to give you a reinstatement repayment plan, you must be able to afford the monthly reinstatement payments. To determine whether or not you would be able to afford a reinstatement repayment plan, you must be able to pay the past-due amount in equal monthly installments over the length of the particular repayment plan, plus whatever the amount is of your regular monthly mortgage payment. For ease of understanding, consider the following example:
John Borrower has regular monthly mortgage payments of $1,200.00. John Borrower temporarily falls behind on his mortgage payments in January of 2017. In March of 2017, John Borrower wishes to catch up on his past-due mortgage payments and bring his mortgage loan account current again to avoid foreclosure of his home. John Borrower is now past-due on his mortgage payments by $3,600.00. If the mortgage lender agrees to give John Borrower a 6-month reinstatement repayment plan, John Borrower will have to pay $1,800.00 a month for the next six months in order to bring his mortgage loan account current. The calculations for this example reinstatement repayment plan are as follows:
- Past-due amount: $3,600.00
- Regular monthly mortgage payment: $1,200.00
- Length of reinstatement repayment plan: 6 months
* Past-due amount divided by length of reinstatement repayment plan, plus regular monthly mortgage payment, equals amount of monthly reinstatement repayment plan payment:
$3,600.00 ÷ 6 = $600.00
$600.00 + $1,200.00 = $1,800.00
If you have fallen behind on your mortgage payments but are interested in negotiating a reinstatement repayment plan with your mortgage lender to avoid foreclosure of your home, we welcome the opportunity to meet with you during a free consultation to discuss what options you may have. For more information about foreclosure defense, Please do not hesitate to contact us to see how we may be able to help you.