What is a reinstatement clause?

A reinstatement clause is a part of foreclosure law in North Carolina. It allows a homeowner to avoid a foreclosure by catching up on missed payments. When a homeowner falls behind on their mortgage payments, the bank or other lender can initiate the foreclosure process. A reinstatement clause, however, will allow them to stop the foreclosure by paying all of their past due payments before the process is finalized. The reinstatement clause is not a long-term solution to a foreclosure issue, but it can provide homeowners with some temporary relief. Generally, the homeowner must pay the past due amounts plus any applicable court fees and late fees. It also gives more time for the homeowner to try and find other sources of payment or to negotiate payment arrangements with the lender. Reinstatement clauses are also included in some loan agreements. These agreements enable homeowners to avoid foreclosure in the event that they default on the loan. While not all lenders offer reinstatement clauses, they are useful tools for homeowners to try and avoid costly foreclosure proceedings. Reinstatement clauses can be beneficial to both parties involved. They help homeowners avoid foreclosure and they help lenders by providing them with a way to avoid the time and expense of the foreclosure process. A reinstatement clause should be considered when a homeowner is having difficulty making their mortgage payments.

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What is a reinstatement clause?

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