Im no expert, but I believe all of the government mortgage insurance programs and PMIs require the lender to accept reinstatement right up until the final sale. Plus, I would think that just a threat of a phone call would make them yell uncle–regardless of any contractual obligations. If they lost their underwriter, they would lose a LOT of business.
In the US, with our strong legal system, we tend to forget that business reputation means much more than contract law.
Question For The Foreclosure Experts - Posted by Bill K. - FL
Posted by Bill K. - FL on April 22, 2000 at 15:16:01:
In your experience, is there any incentive for a foreclosing lender to accept either full or partial payment to reinstate the mortgage just prior to the foreclosure sale on government or privately insured mortgages? Or will they refuse because they are guaranteed to receive the full judgement amount from HUD, VA, or a private mortgage insurer anyway?
Re: Question For The Foreclosure Experts - Posted by Ben in Ohio
Posted by Ben in Ohio on April 23, 2000 at 09:04:24:
If you are asking will they accept a short sale on the note it is a question I have asked and not had an answer. If I find the answer I will post it here.
Re: Question For The Foreclosure Experts - Posted by JoeKaiser
Posted by JoeKaiser on April 22, 2000 at 23:25:03:
Here’s how it works here in Washington State.
The lender, by STATE law, must accept reinstatement money at any time prior to 11 days before the foreclosure sale. Our sales are always on Fridays, so we know that we need to bring these things current on the Monday a week and a half before the sale.
Lenders cannot refuse reinstatement funds, but they can refuse partial reinstatement funds.
After the Monday that falls 11 days before the sale, the lender can demand satisfaction in full of the entire principal balance. However, many do in fact let you reinstate right up until the sale date.
Often, when within the 11 day window with an uncooperative lender, people will file bankruptcy for the sole purpose of pushing that sale date out into the future and effectively recreating that 11 day window.
It didn’t take long for lenders to figure that out and now when someone files bankrutcy to recreate that window, lenders postpone the sale not for the 30 days they used to, but for only one week . . . and then they just do it again and again and again.