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FACT: The two words have dramatically different meanings. To reinstate a loan means that the consumer is behind on their mortgage payment but has arranged with the bank to catch up the past due amount. Even though the lender has accelerated the loan (demanded payment in full along with all applicable costs and fees) the lender reserves the right to allow a re-instatement if they so choose. Most often the lender will decide this is a reasonable option in order to avoid a foreclosure if the consumer’s situation has changed and it appears likely that payments will be made in the future in a timely fashion. The amount needed to reinstate usually includes all past due payments, interest and may include attorney fees. Once the borrower has reinstated the loan, they resume payments just as they had before the default.
On the other hand, redemption typically means that the borrower must pay the entire amount of the loan plus all costs including attorney fees in order to re-claim their home AFTER the foreclosure has been completed. A consumer’s right to redemption, including how long they have in order to exercise this right, is determined by state statutes. What fees the lender is able to collect is governed by the terms of the mortgage note or the deed of trust. Redemption timeframes vary from a very short period of time which expires at the time of the sheriff’s sale or may continue for a matter of months. The longest redemption period in the country (related to foreclosure due to failure to make timely mortgage payments), is 1 year, in the state of Alabama.
Watch for a section on State foreclosure laws which will include redemption timeframes which will be included on the Home Ownership Matters website by the end of April under the Foreclosure section. Share the knowledge with your friends.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)
On the other hand, redemption typically means that the borrower must pay the entire amount of the loan plus all costs including attorney fees in order to re-claim their home AFTER the foreclosure has been completed. A consumer’s right to redemption, including how long they have in order to exercise this right, is determined by state statutes. What fees the lender is able to collect is governed by the terms of the mortgage note or the deed of trust. Redemption timeframes vary from a very short period of time which expires at the time of the sheriff’s sale or may continue for a matter of months. The longest redemption period in the country (related to foreclosure due to failure to make timely mortgage payments), is 1 year, in the state of Alabama.
Watch for a section on State foreclosure laws which will include redemption timeframes which will be included on the Home Ownership Matters website by the end of April under the Foreclosure section. Share the knowledge with your friends.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)
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