Definition - What does Reinstatement Period mean?
A reinstatement period is a period of time when a borrower who is being foreclosed upon can reinstate the mortgage by paying the money that is owed. In other words, it is a small window of opportunity that a borrower has to neutralize the debt that is owed and thus stop the foreclosure proceedings. If the borrower succeeds in coming up with the money, then the mortgage will go back to normal. If not, then the lender can seize the home.
Justipedia explains Reinstatement Period
If a borrower defaults on a home loan repayment, then the lender may wait for a period of time without beginning foreclosure proceedings. However, if the lender does begin foreclosure proceedings, then the borrower only has a certain amount of time before the home is foreclosed upon. For example, a man who defaults on a payment of $10,000.00 may start to be foreclosed upon by his bank. However, his bank may also give him a reinstatement period of one month to come up with the money. If he does, then he can prevent foreclosure.
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