Some homeowners in foreclosure who have not been successful with typical loss mitigation options (repayment plan or modification) still have an absolute right to reinstate their mortgages. Reinstatement is when the borrower is able to cure all mortgage arrears by paying the full sum of such arrears. Once the lender receives the reinstatement funds, it is required to reinstate the mortgage and discontinue the foreclosure action if one was commenced. The homeowner will continue making all future monthly mortgage payments. Many mortgages are contracts and have provisions limiting this right. Many mortgages prohibit reinstatement after a judgment of foreclosure and sale is granted by a court. Despite this prohibition, the homeowner has an absolute right to reinstate the mortgage. RPAPL Section 1341 permits a homeowner/mortgagor to reinstate a mortgage from the date of default to the time just before the mortgaged property is sold at auction. Whenever a homeowner is in foreclosure, he or she should always contact an experienced foreclosure attorney to fully protect the homeowner's rights.
Arnold M. Bottalico is an experienced Long Island, NY foreclosure attorney with over 25 years of experience, and he welcomes your questions and comments.