Reinstatement
Paying everything that’s past due, in one sum.
Reinstating means paying the full amount you’re behind, plus late charges and the foreclosure costs added so far, so the loan is current again and the foreclosure ends. After that, you resume the regular monthly payment as if nothing had happened.
Washington law gives borrowers a right to reinstate a deed of trust until eleven days before a scheduled trustee’s sale. The figure grows the longer you wait, because fees and costs keep accruing. Ask the servicer or the trustee for a written reinstatement quote with a good-through date, and pay with the method they specify.
When it tends to fit
You had a temporary setback and now have the money in hand: savings, a tax refund, help from family, or the proceeds of selling something else. If the money would come from a retirement account, ask a tax professional what the withdrawal will cost after taxes and any penalty.
Repayment plan
Catching up over a few months.
A repayment plan spreads the past-due amount across a set number of months. Each month you pay your regular payment plus a portion of what you missed, until the loan is current. Servicers offer these often, and after reinstatement they’re usually the simplest arrangement to make.
When it tends to fit
The hardship is behind you and your income is back where it was, with room to spare. If the combined payment would stretch you thin, a plan can fail partway through and leave you further behind than when you started. Be honest with yourself about the monthly number before you agree to it.
Forbearance
A pause, with the bill still waiting at the end.
In forbearance, the servicer agrees to reduce or suspend your payments for a period, often a few months. Interest usually keeps accruing. When the period ends, the skipped amount has to be handled somehow: paid in full, folded into a repayment plan, moved to the end of the loan, or addressed through a modification.
Ask at the start what happens when the forbearance ends, and get the answer in writing. The rules differ between conventional, FHA, VA, and USDA loans, and between servicers.
When it tends to fit
Your income dropped for a reason with an end date in sight, such as a medical leave or a layoff with a new job already lined up. Forbearance buys time. It doesn’t reduce what you owe.
Loan modification
Changing the loan so the payment fits.
A modification permanently changes one or more terms of your loan. A servicer might lower the interest rate, extend the term, add the past-due amount to the balance, or set part of the principal aside to be paid when the loan ends. The aim is a monthly payment you can sustain on the income you have now.
Expect paperwork: pay stubs, bank statements, tax returns, a hardship letter, and a monthly budget. Many servicers start with a trial period of several on-time payments before the change becomes permanent. Send everything they ask for, keep copies, and write down the date you sent it. Federal servicing rules give added protection to borrowers who submit a complete application well before a scheduled sale, which is one more reason to start early.
When it tends to fit
Your hardship is lasting, but you have steady income that could support a somewhat lower payment. If staying is the goal and the hardship won’t end soon, this is usually the first application to make.
Refinancing
Replacing the loan with a new one.
Refinancing pays off your current loan with a new loan on terms you can manage. With late payments on your credit report, qualifying with a conventional lender is difficult, and the options that remain can carry higher rates or fees. Read any offer closely, especially one that arrives unsolicited after a notice has gone out.
When it tends to fit
You have substantial equity and steady income, plus either a short delinquency or a co-borrower with strong credit. If a lender quotes you, compare the full cost of the new loan to the cost of the other options on this page.
