If you fall behind on your mortgage payments, your lender may inform you that you are in default and must pay the entire balance of your loan immediately. However, if you are unable to make even your monthly payment, it's unlikely that you can afford to pay the balance in full. To prevent the lender from foreclosing on your home, you must reinstate your mortgage.
After the lender declares your mortgage delinquent, he typically demands payments in full, so you can no longer keep the loan current with monthly payments. If you don't pay the balance in full, the lender will sue you. If you ask for a mortgage reinstatement, however, the lender releases you from default and allows you to resume making regular payments on the loan. Reinstatement may occur before or after the lender files a lawsuit for foreclosure.
To reinstate your mortgage, you must typically bring your mortgage current by paying all of your missed payments. You must also pay any late fees your lender has assessed. In most cases, you must pay the full amount that you owe in a lump sum to qualify for reinstatement. If your lender has already begun the foreclosure process, you must reinstate your mortgage before the sheriff's sale in order to keep your home.
After your lender reinstates your mortgage, you will resume making payments each month. You must make your payments on time and in full to maintain your mortgage. If you miss a payment after the reinstatement, the lender may declare your loan to be in default again. If your lender considers your loan delinquent again, she may file a lawsuit against you and foreclose on your home.
Some states, such as Illinois, will only allow you to reinstate a mortgage once every five years in cases where your lender has already begun the foreclosure process. If you live in such a state and you default on your mortgage after reinstatement, you must contact your lender and negotiate a resolution before he files a lawsuit. Otherwise, you won't be able to save your home from foreclosure through another reinstatement.