Mortgage Reinstatement Timeframe

6 Replies

I have a seller who received a NOD on their current home last August. I am currently negotiating a contract for their rental property. They plan to use proceeds from the sale of the rental to put towards reinstating the mortgage on their current home.

Question: 

1. How can I find out when the next step of the foreclosure process begins, aside from asking the seller? They say there is a payment coming up soon, but haven't given me a date.

2. If there's no way, does anyone have any strategies for getting that info from a seller (besides the obvious "Just ask!")?

3. Are reinstatement periods negotiable? Or, are there defined timeframes that banks must adhere to?

Thank you all in advance!

There is no time frame, but they must attempt to reinstate the loan. All amounts due would need to be paid.

Sounds like, you're not buying traditionally as the loan would be paid off at closing. If you think you're doing an installment contract with that borrower/property on the radar screen, you need to think again. 

There are also new federal regulations concerning "helping" someone in foreclosure and delaying any process, which an installment sale could be viewed as doing, it's also a due on sale issue. You need to get advice from a local attorney, IMO. Good luck :)  

Thanks for the input, Bill. We are actually doing none of those things. 

Sorry if I was unclear. Here is the situation: Sellers are selling a rental property for which the mortgage is current. The home they live in currently (different than the one they are selling) has an amount due from a NOD last August. We are cash buyers, purchasing the rental (not primary) home, and paying off the mortgage on the rental property. The seller plans to use that proceeds from that sale to pay off the amount due on their primary residence to reinstate the mortgage.

Does that make more sense?

@Craig Norris

Seller's Rental Property, you buy it, they use the money for their private reasons.

I would NOT get involved with foreclosure assistance.

You can buy for cash their house.

You can lend money to them to help them.

But that is it.

FORECLOSURE RESCUE is fbi and cfpb and state attorney general's office area of concern.

DO NOT get involved with foreclosures after the NOD unless you pay all cash.

Do not do sub2 or contract for deed offer.

See FBI vid

@Brian Gibbons Thanks for the video. We certainly have never mentioned or hinted or implied to provide the seller with "help" regarding their primary residence. The only property being discussed and negotiated for is the rental property, and that mortgage is up to date. The seller mentioned there is a "payment due", however never stated what that payment was for. I only know about the NOD because of my own research. Likewise, I have not counseled the seller as to what they should do with the proceeds from the sale of the rental property.

On a side note, if anything were to happen, my wife is a criminal defense attorney and would likely represent me at a considerable discount! ;p

Craig it's good to have a criminal defense attorney handy LOL

@Craig Norris

You can look up their deed of trust and see who the Trustee is, you or better, your wife can call them and ask about the status as a payoff or reinstatement, as you might make them a loan in the matter. Owner occupied will have 6 months to a sale, 

I see why you don't want to ask the seller, but they might tell you what they know, but they may not be correct.

Yes, we make assumptions when things aren't clear. You're fine :)

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