Loan Reinstatement
Loan Reinstatement – Helpful Information
What is a Loan Reinstatement?
Loan or home reinstatement has several meanings that can vary from lender to lender. The specialized meaning that we are discussing is the process of a homeowner getting their house back after a foreclosure takes place. People are sometimes surprised to find that with the right guidance and in the right situation, a person can get a home back after foreclosure. However these situations are very rare.
A loan reinstatement is where you are delinquent on your payments, you get a payoff quote from the lender and precisely following the lenders directions pay the entire amount on the payoff statement by the date specified in order to bring he loan current.
Who can qualify for Home Reinstatement?
Home reinstatement can only realistically happen in certain situations.
To be eligible for home reinstatement a person must have had their home foreclosed upon by their lender. If a short sale or deed in lieu of foreclosure was used, home reinstatement is not a likely option.
The next requirement is that during the foreclosure auction, it did not sell to an outside third party. When a home does not sell at auction, the bank or lender retains ownership. When a bank owns a property after foreclosure it is referred to as “Bank Owned” or “Real Estate Owned (REO)”. If a lender wrongfully foreclosed and the home was sold to a third party they do have the power to undue it, but they must admit that they did wrongfully foreclose. We have seen this only a couple of times.
Though it is not a requirement, home reinstatement is much more likely if the person involved has at least half of the past due loan amount on hand. A person that is pursuing home reinstatement must prove that this home will not be foreclosed again.
How does the Home Reinstatement process work?
Once the above conditions are met, there are two avenues to home reinstatement. In both of the following situations, it is important to note that the final decision is at the grace of the lender. A person pursuing home reinstatement must prove that they can now afford the home.
The first avenue to home reinstatement is known as rescinding and reinstating a loan. For this type of reinstatement an experienced attorney analyzes all of the foreclosure documents looking for a mistake on the part of the lender. If an error is found, a person has an opening to get their foreclosed home back. After agreement with the lender, the previous loan is activated again and the homeowner can move back into their home.
The second path to home reinstatement is called redemption and it is an exceedingly complicated legal matter. Home reinstatement by redemption would only be considered after all loan and foreclosure documents are reviewed and no lender errors are found. An experienced and reputable attorney would sit down with a client and weigh the costs and benefits of redemption before moving forward with this process.
We are experienced California Foreclosure Attorneys and California Foreclosure Prevention Attorneys. We are a unique and powerful combination and can help you with your real estate legal issues. We have helped thousands of people with pressing real estate issues find solutions and relief through the use of short sales, deed in lieu of foreclosures, strategic foreclosures, mortgage debt settlements and legal real estate review and advice.
Our real estate attorneys have achieved proven results and can give you the great legal advice and strategy needed to get you the results you want. Contact us today to schedule your complimentary attorney consultation by clicking HERE or by calling 916-999-1376. We look forward to helping you with all of your loan reinstatement real estate needs.
