Terms / Definitions
DEMAND LETTER/NOTICE TO ACCELERATE
The "Notice of Acceleration" sometimes called a "Demand Letter," normally states that the whole balance is due and payable immediately. If you fail to pay the entire amount due, the lender has the right to foreclose on the mortgage. However, the lender must comply with the requirements of the loan documents and other relevant laws, so it is important to seek advice from a HUD-approved credit counselor or an attorney as soon as you receive a "notice of acceleration/demand letter."
Foreclosure is a legal process by which a lending institution can repossess your home when payments are not made. The mortgage company can legally begin foreclosure proceedings once you have missed your payment by one day. They typically do not begin the official foreclosure proceedings until you are 3-4 months past due. They will threaten you with foreclosure but it is not until they actually hire an attorney and file the foreclosure paperwork in the court system that you are officially in foreclosure. The entire process can take as little as 21 days and as long as a year. This duration will depend on the State’s foreclosure laws.
A mortgage is an agreement by which someone borrows money from a money-lending organization such as a bank or savings-and-loan association and gives that organization the right to take possession of property given as security if the loan is not repaid.
Redemption means that you must pay off the entire balance owed on the loan plus the lender's foreclosure fees and costs (not just the payment arrears). In general, there is no right to redeem after the confirmation of the Sheriff's Sale.
The reinstatement amount is the total amount that is past due, including late fees and attorney costs. This amount will get your mortgage caught up immediately. Because of your financial circumstances in the past, you may be facing a sizable amount of past-due fees, including back payments, late fees and legal expenses. If you are able to promise a lump-sum to bring your payments to a current status by a specific date, you may be eligible for a Reinstatement.
You have up until the date of the Sheriff’s Sale to work out arrangements with the mortgage company or to pay the total amount owed (reinstatement amount). At the Sheriff’s Sale your house will be sold. An outside party may bid on your home. If no bids are received, the home goes back to the lender.