Tuesday, June 19, 2012

How to Negotiate Loan Reinstatement

By Melly Parker

If your mortgage payment became too much for a while and you missed some payments, you are eligible to reinstate your loan so that you avoid foreclosure if you can prove that you can make the missed payments and continue making monthly payments to the bank. Avoiding foreclosure can help you escape bankruptcy, keep your home, and improve your credit score. You're not trying to beat the bank; they're your partner in coming to a financial arrangement that works for you both.

Make an appointment to see your mortgage lender. While waiting to meet with a representative from your lending company, write a letter explaining why you were unable to pay your mortgage, how you will be able to keep up with the payments now, and how you expect to pay back the money you missed. Gather all of your mortgage and financial documents, like taxes, other bills and pay stubs, to bring with you to the appointment.

Discuss your reinstatement options with your mortgage lender representative. Offer to pay back the money you missed in a lump sum, if possible. If it's not possible, then show them how you will pay it back over time. Remember that paying back the missed money quickly is important to the lender.

Offer to pay in a lump sum if the lender can reduce the debt a bit. Some mortgage lenders will agree to reduce the total cost of the missed payments up to 25 percent if you can pay the other 75 percent on the spot when you sign the reinstatement. Do not agree to a payment schedule that you cannot meet.

Go through your documents with the representative from the lending company, pointing out income and explaining how you will be able to meet your obligations. When he agrees, sign the required documents. Be sure that you stick to the terms of the loan. It's much harder to get a second reinstatement with the same lender.

Contact a lawyer with experience in loan reinstatement if you cannot come to an agreement with your lender. He may be able to help you negotiate a more attractive settlement. Try to do it alone first, though, because a lawyer will cost additional money that could be going toward your mortgage.


http://www.lenderva.com

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