source:
  type: guide
  id: hud-4000-1-iii-o-reinstatement
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — o. Reinstatement
    (03/31/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — o. Reinstatement
    (03/31/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-o-reinstatement-full
  canonical_id: hud-4000-1-iii-o-reinstatement-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — o. Reinstatement
    (03/31/2022)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — o. Reinstatement
      (03/31/2022)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'o. Reinstatement (03/31/2022) i. Standard The Mortgagee must
      allow reinstatement of the Mortgage if the Borrower offers, in a lump sum payment,
      all amounts to bring the account current, including costs incurred by the Mortgagee
      in instituting foreclosure, except under any of the following circumstances:
      • within the two years immediately preceding the initiation of the current foreclosure
      action, the Mortgagee has accepted reinstatement in a previous foreclosure action;
      • reinstatement will preclude foreclosure following a subsequent Default; or
      • reinstatement will adversely affect the priority of the mortgage lien. III.
      SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages
      2. Default Servicing Handbook 4000.1 1283 Last Revised: 11/26/2025 ii. Incurred
      Costs (A) Property Inspections/Preservation When a Mortgage in Default is reinstated,
      the Mortgagee may charge the Borrower the costs of property inspections and/or
      preservation, so long as the costs are: • reasonable and customary for those
      services, as established in the Mortgagee Property Preservation and Protection
      Action section; and • consistent with HUD requirements, state law, and security
      instruments. (B) Inspection Cost Collected from Borrower The Mortgagee may collect
      the cost of the inspections from the Borrower only when: • the Mortgage was
      reinstated or paid in full; • the Mortgagee has performed and properly documented
      the inspections pursuant to HUD requirements; and • the cost of each inspection
      was reasonable and within the cost limitation established by HUD. The Mortgagee
      must not collect inspection costs from the Borrower''s escrow account or charge
      for an Occupancy Inspection performed after successful contact with the Borrower
      or occupant. (C) Attorney’s and Trustees’ Fees If the Mortgagee cancels a foreclosure
      action for a Loss Mitigation Option, a reinstatement, or a payment in full,
      the Mortgagee may charge the Borrower for attorney’s fees as follows: • The
      attorney’s fees to be paid by the Borrower must be commensurate with the actual
      work performed to that point. • The amount charged may not be in excess of the
      fee that HUD has established as reasonable and customary for claim purposes.
      iii. Reinstatement during CWCOT If the Mortgagee is using CWCOT procedures and
      the Borrower reinstates the Mortgage after foreclosure has been instituted,
      the Mortgagee must: • cancel the appraisal if the appraisal has not yet been
      completed; or • request that the Borrower reimburse the Mortgagee for the cost
      of the appraisal as part of foreclosure-related expenses, if the appraisal cost
      was validly incurred. iv. Reporting Reinstatements When a Delinquent Mortgage
      is reinstated, the Mortgagee must report the appropriate Account Reinstated
      Code in SFDMS to indicate whether: III. SERVICING AND LOSS MITIGATION A. Title
      II Insured Housing Programs Forward Mortgages 2. Default Servicing Handbook
      4000.1 1284 Last Revised: 11/26/2025 • use of Repayment Plans or HUD’s Loss
      Mitigation Options assisted in the reinstatement; • reinstatement was due to
      a sale of the Property using a mortgage assumption; or • the Borrower was able
      to reinstate the Mortgage on their own.'
  judgment: false
