I have not made a mortgage payment in 120 days, am I eligible for the reinstatement plan?

by Thomas D. Richards, Lawyer Referral Service Panelist

In a Reinstatement Plan, the foreclosure case is dismissed and you borrow the money to make up the back payments completely and have the income to make the future payments going forward.  Your interest rate stays the same and your monthly payment stays the same as is required in your original mortgage loan.  Most people who qualify for this option have a family member who will sponsor them and loan/gift them the money to get caught up.  You may be fortunate enough to win the money with a lottery ticket.  However, the amount needed for reinstatement can be substantial.  The lender will add to the payoff for the reinstatement of all of their legal fees incurred in the foreclosure case, plus all late fees and any costs and expenses incurred.  (For example, with four months of missed payments (4 x $800) at $3,200, plus legal fees/costs at $2,000, plus late fees/expenses at $1,000, the reinstatement amount would be $6,200.)  You will still have to complete all the financial forms to show that you have the income to make the future payments after you have made the lump sum payment to get caught up. If you do not have sufficient income to keep the account current going forward, then you will not qualify for this option.

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