Is a Reinstatement a Possibility?

Is Reinstatement a Possibility?




Foreclosure doesn’t have to happen to you and there are options available at your fingertips. Los Angeles area residents have some options that they can use, but many families don’t even know that they are available to them.



There is an option called a reinstatement. A reinstatement takes place when the homeowner asks what the total amount is due as of this date. Then, they pay the money to the lender in full. They don’t pay the full loan amount off, just what they owe up until this point. The reinstatement is the toughest way to go because many families don’t have that type of money sitting around. In my onion if they did they wouldn’t be facing the foreclosure. When people have money available trends show that they will access the money when they can see it coming. This could be anything from a savings account, to a 401 K. Many families have opted to cash out their 401k in hopes that it would save them from a dire situation.



The biggest challenge with doing a reinstatement is that the lender doesn’t have to approve it. They lender can say no way, and the timeframe to get all the money together could be tiring. Time spent signing off on papers and mailing them in is tedious, and this is why anyone who would have opted for this probably would have cashed out their funds months previous to this. Getting the funds released from your 401k may also bring about a tax liability, so sure to talk to a financial advisor or someone you trust before taking this step.