You got a payoff statement or a reinstatement quote: what it means

What these documents are

The rules behind each one

• Payoff statement: for a loan secured by your home, the servicer (or the lender, if it still owns the loan or servicing) must give an accurate payoff amount as of a date you specify, within a reasonable time and no more than 7 business days after a written request from you or someone acting for you.
• That 7-day limit becomes "a reasonable time" when the loan is in bankruptcy or foreclosure, is a reverse mortgage, or after a natural disaster. So if you are in foreclosure, ask early.
• Failing to give an accurate payoff amount is an error you can dispute in writing. The servicer must fix it or answer within 7 business days and cannot take extra time.
• Reinstatement quote: no single federal rule sets a deadline. Your right usually comes from your mortgage or deed of trust and from state law. In the current Fannie Mae and Freddie Mac uniform deed of trust (the California version is one example), you can reinstate after the loan is called due until the later of 5 days before a foreclosure sale or the period your state law allows, by paying what would be due without acceleration, curing other defaults, and paying reasonable attorney fees, inspection and valuation fees and other costs of enforcing the loan.
• You can also send a written request for information asking for a reinstatement figure. The servicer must answer most information requests within 30 business days, so this is a backup, not a fast route.

What to check on any quote

• The good-through date. The figure is only valid through that date. Interest and fees keep adding up, so if you pay later you may come up short.
• Missed payments. Count them against your own records. Each should include principal, interest and any escrow.
• Late charges. Your note sets the amount. A servicer may not charge a late fee on a full, on-time payment just because an earlier late fee was not paid.
• Corporate advances. These are amounts the servicer paid to protect the lender's interest, such as property taxes, insurance, inspections, property preservation and attorney fees. Under the uniform deed of trust they become part of your debt. Ask for an itemized list with dates.
• Foreclosure fees and costs: attorney or trustee fees, court costs, title search, publication and posting. Ask what each one is for.
• Escrow advances or shortage, and any force-placed insurance charges. See escrow shortage and force-placed insurance.
• Money held in suspense. Partial payments the servicer is holding must be shown on your periodic statement. Make sure they are credited on the quote.
• How and where to pay. Your loan papers may let the lender require certified funds or an electronic transfer.

What to do this week

• Send a written request to your servicer (or the foreclosure lawyer or trustee named in your papers) for the figure you need. Ask for an itemized quote good through a date at least a week or two away, and keep a copy of your request with the date.
• Use the deadline calculator and your state page to find the last day you can reinstate or pay off before a sale.
• If a fee looks wrong, ask what it is for, and send a written notice of error if needed. Do not let a dispute run past your deadline. You can ask for an updated quote at any time.
• If you cannot raise the full amount, ask to apply for loss mitigation, such as a repayment plan or loan modification. Call a free HUD-approved housing counselor at (800) 569-4287.
• Before you pay, call your servicer at the number on your own statement to confirm the amount and payment instructions. Pay exactly what the quote says, before the good-through date, and keep proof. Then ask for written confirmation that the loan is reinstated or paid off and the foreclosure is stopped.

What it is called in different states

• Colorado: you file a notice of intent to cure with the public trustee at least 15 calendar days before the sale, then pay the amount on the lender's cure statement.
• Maryland: you can cure up to one business day before the sale, and if you ask, the lender or its agent must tell you the amount and how to deliver it within a reasonable time.
• California: you can reinstate from the recording of the notice of default until 5 business days before a trustee sale.
• Arizona: you can reinstate until 5:00 p.m. Mountain Standard Time on the last day before the trustee's sale that is not a Saturday or legal holiday.
• Illinois: you have 90 days after you are served to reinstate, and generally cannot use that right again on the same mortgage for 5 years.
• Pennsylvania: you can cure up to one hour before bidding starts at the sheriff's sale.
• Florida and New York: state law does not give a general right to pay only what is past due, but you can stop the sale by paying the full amount owed, so the payoff figure matters most.

Scams tied to payoff and reinstatement

• An email or call with new wire instructions, or a "discount" if you pay quickly. Confirm every payment instruction by calling your servicer at a number you already know.
• Anyone offering a loan to reinstate after your foreclosure becomes public, or asking you to sign your home over to them so they can "pay it off" for you.
• Anyone who asks for a fee before you have signed an agreement with your servicer. A company that is not your lawyer cannot charge for mortgage relief until then.
• Anyone who tells you to stop talking to your servicer, your housing counselor or your lawyer.