Cure Default "Reinstatement" Refinance

Irvine Reinstatement Attorney Realtor

Helping Homeowners in Los Angeles, Orange, and San Diego Counties Cure Defaults

The threat of losing your home to foreclosure can be terrifying and upsetting. When you fall behind on your mortgage payments, you will need to carefully review all of your potential options if you wish to stay in your home. If the hardship that kept you from making your monthly installments was only temporary, you may be able to stop the foreclosure process by reinstating your original agreement.

Our Irvine reinstatement attorney realtor at Lawyers Realty Group can help you cure your default and avoid foreclosure. We have assisted thousands of homeowners and have over 50 years of professional experience. Our team is intimately familiar with how foreclosure works in the state of California and can leverage our knowledge to assist you throughout the reinstatement process.

Learn how to safely and efficiently cure a default to reinstate your mortgage by calling (949) 264-0966 or contacting us online.

How Does Reinstatement Work in California?

In order to reinstate your defaulted mortgage, you must cure all outstanding payments owed to your lender. This means that you must “catch up” on all missed payments along with any accumulated interest, late fees, and foreclosure costs.

When you cure your debt, your mortgage agreement returns to good standing, or “reinstates,” as if nothing has happened. Once you settle past due amounts, your servicer puts your mortgage in 'good standing' and allows you to continue making your agreed-upon monthly payments.

In the state of California, you have the legal right to cure a mortgage default and reinstate your loan up until 5 business days before a scheduled foreclosure auction. Because most nonjudicial foreclosures must wait several months before proceeding, this means that you will have a minimum of 6 months from your first missed payment to cure your mortgage default. Your mortgage servicer cannot reject a reinstatement if all missed payments and fees are paid. In fact, they are legally obligated to inform you of this right and help you explore other potential foreclosure alternatives.

What is a Foreclosure?

A foreclosure is the process by which a lender is allowed to force the sale of a home at a public auction after a borrower defaults on a home loan. The borrower’s loan is secured by the home, and if the borrower fails to pay the loan as agreed, the lender has the right to sell the home in an effort to pay off the outstanding balance of the loan.

Types of Foreclosures

foreclose can occur in one of two ways: Either through a judicial foreclosure (through court action) or a non-judicial foreclosure (without court involvement at all). Judicial foreclosure is expensive and time consuming, but it allows the lender to seek damages (in the form of a deficiency judgment) against the borrower/homeowner for the amount left unpaid on the home loan. Non-judicial foreclosure is quicker, less expensive and can be concluded without involving the courts. However, lender are not allowed to seek a deficiency judgment against the borrower after a non-judicial foreclosure.

In California, almost all residential foreclosures are non-judicial. The process operates through a series of notices which are delivered to the property owner/borrower and recorded in the County records (as further described below). These non-judicial foreclosures conclude with a public foreclosure auction, usually in front of the local courthouse or civic center. Note that the sale does not occur INSIDE the court because this is a non-judicial foreclosure and not a legal court action.

Foreclosure cannot start immediately once you miss a payment or even multiple payments. Lending institutions are required to help you explore foreclosure alternatives and wait a minimum amount of time before filing a Notice of Default.

As soon as you stop making payments, however, you will be in breach of your loan agreement. You can expect that your bank will send letters and make phone calls requesting that you pay. You have the right to request that they initiate a financial assessment to determine your current and future ability to make payments as well as reviewing all available loss mitigation options (to avoid foreclosure). At this time, you have the right to request a meeting to explore means of avoiding foreclosure, including loan modifications, loan forbearances, and short sales.

Non-Judicial Foreclosure Process

Here is a brief description of the non-judicial foreclosure process:

  1. Initial Contact From Lender (Foreclosure Avoidance): The lender MUST contact you to assess your financial situation and explore your options to avoid foreclosure. The lender:
  • Cannot start the foreclosure process until at least 30 days after contacting you to make this assessment (or after they have completed certain ‘due diligence’ steps to contact you); and
  • Must advise you during the first contact that you have the right to request another meeting about how to avoid foreclosure. That meeting must be scheduled to take place within 14 days.
  1. Notice Of Default and Election to Sell: If you and the lender have not agreed on a plan to avoid foreclosure, the lender can record a “Notice of Default and Election to Sell” in the county where your home is located. This marks the beginning of the formal foreclosure process and puts the world on notice that the bank intends to sell the property at auction. The lender sends you a copy of this notice by regular AND certified mail within 10 business days of recording it.

Please Note: Since the Notice of Default is recorded as a public document, it can be viewed by anyone and everyone. This can lead to an avalanche of letters, postcards and solicitations from unprincipled loan modification companies, unskilled brokers, unsavory investors and even unscrupulous lawyers all pitching you the “silver bullet” to cure your mortgage problems, for a price of course. Many of these people are violating the law and simply have no intention of helping you. Be very cautious about loan modification companies, trustee postponement services, loan audits, class action and mass joinder scams. Contact us with questions or concerns. Read more on our Frauds/Scams page.

  1. Notice Of Trustee Sale: After 3 months have passed since the recording of the Notice of Default, the bank can take the next step by recording the “Notice of Trustee’s Sale,” which sets the actual date for the public foreclosure auction. That date can be no SOONER than the 20th day after the Notice of Trustee’s Sale is recorded.

The Notice of Sale must:

  • Be sent to you by certified mail.
  • Be published weekly in a newspaper of general circulation in the county where your home is located for 3 consecutive weeks before the sale date.
  • Be posted on your property, as well as in a public place, usually at your local courthouse.
  • Have the date, time, and location of the foreclosure sale; the property address; the trustee’s name, address, and phone number; and a statement that the property will be sold at a public auction.
  1. Public Foreclosure Auction: On the date set forth in the Notice of Trustee Sale, the property can be sold at the public foreclosure auction. Potential purchasers at the auction (typically investor-buyers) must have cash or cashier’s checks for the amount they wish to bid. The high bidder becomes the owner of the property, and the amount paid at the auction goes to the bank that held the mortgage. If the high bid is MORE than the amount of the outstanding mortgage, the overage goes to any other mortgages or other liens on the property. If there is still money left over, it would go to the prior owner. If there is no bidder or if the lender is not willing to accept less than the full mortgage amount at the auction, the lender would be considered the high bidder (i.e. the lender gets to ‘bid’ the amount it is owed on the mortgage without having to bring cash to the auction). If that occurs, the lender takes ownership of the property itself and the property becomes an “REO” (real estate owned by the lender). This entire non-judicial process can take as little as 111 days – that’s less than four months from beginning to end. Please note, however, that this formal process does not commence until after the borrower has been in default for at least a few months.

Your last chance to cure a default and secure reinstatement of your mortgage:. You can cure your debt up until 5 business days before the scheduled foreclosure auction date . After that, you will no longer be able to reinstate your home, and the foreclosure auction will proceed.

Timing is important. It is crucial that reinstatement is carefully handled, especially if you are in immediate danger of losing your home to a foreclosure auction. You will need to notify your lending institution that you intend to cure the debt, receive a current reinstatement amount, and arrange the timely delivery of the funds. Our Irvine reinstatement Attorney/Realtor can help communicate with your lender and facilitate each stage of the reinstatement .

Alternatives to Reinstatement

For reinstatement to be practical, you will need to have a surplus of funds to make the payments you missed as well as the interest and fees that have since accumulated. You will also need to have reliable income to resume making regular payments. If the hardship that led to your inability to pay was only temporary in nature, this may not be an issue.

If you do not have the financial resources to cure the default, there are other strategies that can help you avoid an imminent foreclosure. Filing for Chapter 13 bankruptcy will freeze all foreclosure proceedings through the automatic stay. In a Chapter 13 bankruptcy, you may be able to cure your default over a 3 to 5 year period pursuant to a Chapter 13 repayment plan and keep your home.

At the conclusion of this process, you are typically permitted to discharge unsecured debts, including credit card debt and medical debt. While you cannot discharge mortgage-related debt, Chapter 13 bankruptcy does give you critical time and flexibility that you will need to reorganize your finances and catch up on payments.

Our Irvine reinstatement Attorney/Realtor at Lawyers Realty Group can assist you in exploring all of your foreclosure avoidance options. We can assess the implications of curing your debt and advise on the safest, most efficient, and most cost-effective means of keeping your home.

We are prepared to help you avoid foreclosure. Schedule a free initial consultation with us by contacting us online or calling (949) 264-0966.

Committed to Going Above & Beyond for Our Clients

  • “He worked with us in our case and we felt as if he was on the front battle lines with us taking charge.”

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    - Arnold B.

  • “I can't emphasize how important it is to have legal representation on your side in dealing with the banks, but if you want real representation that's tenacious, honest, professional and successful, you must work with Derik and his team.”

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  • “I have used several realty companies before and Derik is by far the most professional and exceptional businessman I have dealt with.”

    - Jeremy S.
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