Yes. Many homeowners assume that once a Notice of Trustee Sale is recorded, the only way to stop it is a full payoff or a sale. That’s not accurate. The right to reinstate, paying just the past-due amount rather than the entire loan balance, continues after this notice, right up until five business days before the scheduled sale.
Quick answer: Under California Civil Code § 2924c, a homeowner can reinstate a defaulted loan by paying the total past-due amount, missed payments, interest, and fees, up until five business days before the scheduled trustee’s sale. The lender cannot refuse a proper reinstatement payment made within this window. Once paid, the lender is generally required to record a Notice of Rescission confirming the sale has been canceled.
Reinstatement Is Still Available, Even After This Notice
A common misconception is that reinstatement rights end once a Notice of Trustee Sale is recorded, replaced by an obligation to pay off the entire loan. That isn’t correct. According to the Los Angeles County Department of Consumer and Business Affairs, a homeowner can pay off the past-due amount plus fees up until five business days before the sale, and the lender cannot reject that payment if it’s made correctly and in time. Only within the final five business days does the option narrow to a full payoff of the entire loan balance.
What the Reinstatement Amount Actually Includes
The reinstatement figure, sometimes called the cure amount, generally covers:
- All missed monthly payments.
- Accrued late fees and interest on those missed payments.
- Foreclosure-related costs and fees incurred by the servicer or trustee up to that point.
- Any advances the servicer made on the homeowner’s behalf, such as covering property taxes or insurance through an escrow account, if applicable.
It does not require paying off the full remaining loan balance, only what’s actually past due plus associated costs.
How to Get the Exact Figure
- Request a written reinstatement quote directly from the servicer, specifying that this is a reinstatement figure, not a general payoff amount.
- Confirm the “good through” date on the quote, since interest and fees continue accruing and the figure is only accurate through a specific date.
- Review the figure against the amount stated on the Notice of Default and any Notice of Trustee Sale, and raise a question with the servicer or an attorney if the numbers don’t reconcile.
How Payment Actually Has to Be Made
Reinstatement isn’t something that can typically be paid with a personal check or a payment plan at this stage. Servicers generally require certified funds, a cashier’s check or similar guaranteed instrument, made payable as instructed in the reinstatement quote. Confirming the accepted payment method and any delivery requirements, mailed, wired, or delivered in person, directly with the servicer avoids a payment being rejected on a technicality this close to a scheduled sale.
What Happens After Payment Is Made
Once the servicer receives and processes a proper reinstatement payment:
- The default is considered cured, and the loan returns to its normal status.
- The lender is generally required to record a Notice of Rescission, a document confirming the reinstatement was accepted and the scheduled sale has been canceled.
- Confirming this directly with the trustee is still worth doing, rather than assuming the sale is automatically called off the moment payment is sent, particularly if the sale date is very close.
Timeline: Reinstatement Rights Through the Process
| Stage | Reinstatement Status |
|---|---|
| Notice of Default recorded | Reinstatement available for the full 90-day period and beyond |
| Notice of Trustee Sale recorded | Reinstatement still available |
| Within 5 business days of the scheduled sale | Reinstatement generally no longer available; full payoff required instead |
| Sale completed | Neither reinstatement nor payoff can stop the transfer of ownership |
Can the Lender Refuse a Reinstatement Payment?
Generally, no, as long as the payment is made correctly, for the right amount, in the accepted form, and within the legal window. According to guidance from the Los Angeles County Department of Consumer and Business Affairs, the homeowner doesn’t need the lender’s permission to reinstate, and the lender cannot reject a proper reinstatement payment made in time.
A Realistic Example
A homeowner in South Gate has a Notice of Trustee Sale scheduled with an auction date about three weeks out. Assuming reinstatement is no longer an option since the notice has already been recorded, the homeowner initially considers only a rushed sale. After requesting a written reinstatement quote and confirming the figure with the servicer, the homeowner learns reinstatement is still available for another two and a half weeks, until five business days before the sale. Family funds cover the reinstatement amount, paid by cashier’s check as instructed, and the servicer records a Notice of Rescission confirming the sale has been canceled.
Legal and Financial Considerations
None of this is legal advice. An attorney can help resolve a disputed reinstatement figure or confirm a servicer properly processed a payment. A HUD-certified housing counselor can help request and review a reinstatement quote at no cost. Title and escrow companies can confirm recorded status once a Notice of Rescission is filed.
Los Angeles-Specific Notes
The Los Angeles County Department of Consumer and Business Affairs provides direct guidance on this process for county residents. Confirming the recorded Notice of Rescission through the Los Angeles County Registrar-Recorder/County Clerk after a reinstatement payment is the most reliable way to verify the sale has genuinely been canceled.
Frequently Asked Questions
Can I still reinstate my loan after a Notice of Trustee Sale has been recorded?
Yes. Reinstatement remains available until five business days before the scheduled sale, even after this notice is recorded.
What’s included in the reinstatement amount?
All missed payments, accrued interest and late fees, foreclosure-related costs, and any advances the servicer made for property taxes or insurance, but not the full remaining loan balance.
Can my lender refuse to accept my reinstatement payment?
Generally, no, if the payment is correct, in the accepted form, and made within the legal window. The lender doesn’t need to approve the reinstatement separately.
How do I know exactly how much to pay?
Request a written reinstatement quote directly from the servicer, and confirm the date through which the figure remains accurate, since interest and fees continue accruing.
What form of payment is required?
Generally certified funds, such as a cashier’s check, rather than a personal check. Confirm the exact accepted method and delivery instructions with the servicer.
How do I know the sale has actually been canceled after I reinstate?
The lender is generally required to record a Notice of Rescission, and confirming this recording through the county recorder’s office is the most reliable proof.
What happens if I’m within the last five business days before the sale?
Reinstatement is generally no longer available at that point. A full payoff of the entire loan balance becomes the remaining option to stop the sale through payment alone.
What if my reinstatement figure seems wrong?
Raise the discrepancy directly with the servicer, and consult an attorney if it isn’t resolved, since an inaccurate figure can cause real problems this close to a scheduled sale.
Does reinstating cost less than a full payoff?
Generally, yes, significantly. Reinstatement only requires the past-due amount and associated fees, not the entire remaining loan balance.
How EZ Casa Buyer May Help
If reinstatement isn’t realistic given the funds available, we’re glad to explain how a sale, direct or otherwise, compares given the specific deadline and numbers involved.
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