Mortgage Reinstatement: What Is It and How Does It Work?

What Is Mortgage Reinstatement?

Mortgage reinstatement is when you pay the full amount of your missed mortgage payments, plus any late fees and penalties, to bring your loan current.

Once you make this payment, your lender will “reinstate” your mortgage, meaning you’ll go back to making your regular monthly payments as if you had never fallen behind. This can help you avoid foreclosure if you’ve fallen behind on payments but now have the funds to catch up.

What Is a Mortgage Reinstatement Letter?

A mortgage reinstatement letter — also called a reinstatement quote — is a written document from your mortgage servicer that tells you exactly how much you need to pay to bring your loan current.

If you’ve missed enough payments that your loan is in default, your servicer is usually required to send you this letter. If you haven’t received it yet, don’t wait. Contact your mortgage servicer and ask for a reinstatement quote.

This letter typically includes:

• The total amount you need to pay, including:

  • Missed payments

  • Late fees

  • Pre-foreclosure costs (like legal or inspection fees)

  • Any other applicable charges

• A deadline for when the full amount must be paid

• Instructions on how to make the payment

• Contact information if you have questions

Because mortgage charges can change from month to month, your quote might be different if you wait too long. Interest and fees can add up quickly, so always ask for an up-to-date letter in writing.

If your servicer refuses to give you a reinstatement quote, that may be a violation of federal mortgage servicing rules.

How Does Mortgage Reinstatement Work?

Even if your mortgage paperwork doesn’t mention reinstatement directly, most lenders allow it. If you think reinstatement might work for you, reach out to your mortgage servicer early.

Here’s how the mortgage reinstatement process usually works:

Step 1: Contact Your Mortgage Servicer

Start by calling your mortgage servicer and letting them know you’re interested in reinstating your loan. Your servicer is the company that manages your mortgage. It's not always the same company as your original lender. You’ll need to ask for a reinstatement quote (also called a reinstatement letter or payoff quote).

This document will tell you how much you need to pay to bring your loan current, including:

• All missed payments (principal and interest)

• Late fees

• Any other charges like legal or inspection fees

Ask the servicer to send this quote to you in writing. That way, you have a clear record of how much you owe and when the payment is due.

Step 2: Review the Reinstatement Quote for Accuracy

Once you get your quote, go over it carefully. Servicers sometimes make mistakes.

You might see:

• Payments you already made that weren’t counted

• Extra fees that don’t belong

• Incorrect due dates or totals

If something looks wrong, call your servicer and follow up with a written notice of error. This letter should clearly explain the issue and include any proof you have (like bank statements or confirmation numbers).

The Consumer Financial Protection Bureau (CFPB) offers a sample notice of error letter and detailed instructions for submitting it.

After you send the letter, your mortgage servicer must:

• Confirm they received your letter within 5 business days

• Investigate and respond within 7 business days (they can ask for a 15-day extension if you agree)

Step 3: Pay the Full Reinstatement Amount

If everything looks correct, or once any errors are fixed, you’ll need to pay the full reinstatement amount by the deadline listed in your quote. Unfortunately, partial payments usually aren’t accepted for reinstatement.

Timing matters. The longer you wait, the more interest and fees may get added to your balance. If the deadline passes, your servicer may continue with the foreclosure process.

If you're short on funds, some homeowners use a tax refund, a bonus, help from friends or family, or sell personal property to raise the money. Others explore borrowing options like a personal loan or hardship loan from a retirement account.

Just be sure to understand the risks and terms before borrowing from any source.

Step 4: Confirm Your Loan Is Current

After you make your payment, follow up to make sure your loan has been reinstated. Ask your servicer to send written confirmation that your loan is current and foreclosure has been canceled or paused. Also, check your next mortgage statement to make sure everything looks right.

If your loan isn't updated or you’re still getting foreclosure notices, call your servicer immediately to find out why. Keep records of every payment and conversation in case you need them later.

What If You Can’t Afford To Reinstate Your Mortgage?

Reinstating your mortgage can be a great way to avoid foreclosure, but it requires paying a large lump sum. If you're already behind on bills, that kind of money may be out of reach.

The good news is that reinstatement isn’t your only option. Many people in this situation explore other ways to save their home, or at least avoid the long-term damage of foreclosure.

Here are a few alternatives that might be available to you:

• Loan modification

• Mortgage forbearance

• Chapter 13 bankruptcy

Modify the Loan

A loan modification changes the terms of your mortgage to make it more affordable. Your lender might agree to:

• Add missed payments to the end of your loan

• Reduce your interest rate

• Extend your loan term to lower your monthly payment

Some people also qualify for what's called a flex modification, which can lower monthly payments by combining several of these changes. If you're approved, this option can help you catch up without needing a lump-sum payment.

Mortgage Forbearance

In some cases, your lender may offer a forbearance plan, which pauses or reduces your payments for a period of time. At the end of the forbearance, you might be able to:

• Resume normal payments and repay the paused amounts over time

• Add the missed payments to the end of your loan (a deferment)

• Apply for a loan modification

File Chapter 13 Bankruptcy

If you're far behind on mortgage payments — and also juggling other debts like medical bills, credit cards, or personal loans — some people in this situation choose to file Chapter 13 bankruptcy.

This creates a 3–5 year payment plan to help you catch up on what you owe and possibly get rid of other unsecured debt. Many filers use Chapter 13 to stop foreclosure and stay in their homes while getting a handle on their finances.

Sell the Home

If it’s clear you won’t be able to afford the home in the long run, some people choose to sell it before the foreclosure process is complete. This can help you avoid a foreclosure on your credit report and give you more control over the transition.

Let's Summarize...

If you had a temporary setback that put you behind on your mortgage payments but you’re able to catch up now on the past-due payments, mortgage reinstatement might be a good option for you.

Even if you don’t have that kind of money, you could still work with the mortgage servicer to create a repayment plan through a loan modification. You can also file Chapter 13 bankruptcy and keep your house by signing and sticking with a repayment plan.

Call your mortgage servicer and find out how much you owe to reinstate your loan. If you can’t pay, look at the many other options that might be available or consider scheduling a free consultation with a bankruptcy attorney.