Reinstatement

Reinstatement is curing a mortgage default — paying what is owed plus costs, after which the loan continues as though the default had not occurred.

It is the most useful remedy in Minnesota foreclosure and the one homeowners are least likely to ask about, because they ask the wrong question first.

The deadline#

Any time before the sheriff's sale, under Minn. Stat. 580.30. It applies to both foreclosure by advertisement and foreclosure by action.

That deadline is hard and it is the sale itself. Not the notice, not the publication, not some point in the process — the moment the sheriff sells.

After that, reinstatement is gone. The remedy becomes redemption, which requires the full sale price plus interest and allowable costs.

The difference between those two numbers#

This is the whole point.

Reinstatement: four missed payments, late fees, publication costs, service costs, statutory attorney's fees. Perhaps eight or ten thousand dollars.

Redemption: the entire amount bid at the sheriff's sale, plus interest from the sale date, plus taxes and insurance the certificate holder advanced. Frequently two hundred thousand or more.

Same house, same borrower, same debt. The date the number changes is the sale date, and nothing about it is negotiable.

What reinstatement costs, specifically#

Minn. Stat. 580.30 sets it out: the amount actually due at the time of tender, attorney's fees limited by statute, publication costs, service costs, and other lawful disbursements necessarily incurred in the foreclosure proceeding.

The statute caps the attorney's fee component, which matters — it prevents the reinstatement figure inflating without limit as the foreclosure progresses.

There is also a provision reducing the attorney's fee where, at the commencement of the foreclosure, everything constituting the default was less than 30 days past due.

Ask the right question#

A homeowner who calls their servicer and asks "how much do I owe" gets quoted the payoff.

The payoff is the whole loan. For almost everyone it is an impossible number, and hearing it is what causes people to conclude that nothing can be done and stop trying.

Ask for a reinstatement quote. Those three words produce a completely different figure, and it is the one that determines whether the house can be kept.

Junior lienholders can reinstate too#

The right extends to the holder of a junior lien or encumbrance.

That is why a second mortgage holder sometimes cures a first mortgage default — their own security is wiped out if the first forecloses, so paying the arrears protects their position at far less cost than losing it.

Get the quote in writing#

With a good-through date, and confirm how funds must be delivered. Servicers in active foreclosure commonly require certified funds and refuse personal cheques, which is not something to discover on the last available day.