That is not a modification but a reinstatement. Do not accept that deal as it could jeopardize your chances to obtain a permanent modification which will lower your payment. It is illegal for a non lawyer to charge you anything upfront for a modification and what he has one is not a modification. You should retain a firm that handles foreclosure defense and has experience doing modifications it is a complex practice.
What you describe is a modification since it changes the terms of the loan. A reinstatement is when you pay off the arrears and pick up the loan where you left off with the same terms as the original loan.
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Please retain a lawyer that handles modifications and foreclosure defense. I would not advise giving this individual any more money until the file is reviewed by an attorney.