By James A. Gage
Loss mitigation is the process of trying
to stop a home foreclosure before it occurs.
The loss mitigation process can be led by
a representative of the lien holder or a third party that is
working for the home owner.
It is often better for a disinterested
third party to handle the situation as they can work with a
lending company without any emotional feelings.
Loss mitigation was introduced as a
collaborative effort between the federal government and the
mortgage industry many years ago; contrary to popular belief
it wasn’t something started because of the sub-prime melt
down! The program was established to help home owners that
were facing the loss of their homes due to delinquent
payments and hardships.
It is nearly impossible to complete a
successful short sale without dealing with the loss
mitigation department at the bank How you deal with loss
mitigation department is critical to a successful
Some bank customer service reps may say
that the bank does not have a loss mitigation department.
Keep trying! They have the department you are looking for,
just under another name. Ask if the bank has a work-out
department, foreclosures department or short sale
There are several options when it comes to
loss mitigation but the main focus must be to keep the home
owner in their home if possible. A loss mitigation
professional will first seek to set up a loan modification
plan or a repayment plan ( aka forbearance) that is
realistic for the home owner as well as agreeable to the
lending institution. With the repayment plan, it is
imperative that the plan be realistic when it comes to the
home owners ability to repay the amount that is delinquent.
Obviously there has been a prior financial situation so the
solution must be beneficial to the homeowner.
Loss mitigation is about keeping the home
owner in their home. If that does not seem like a possible
out come, every attempt should be made to help the home
owner get the most for their home; hopefully avoiding a
foreclosure sale. This may include deed-in-lieu of
foreclosure or a short payoff if a qualified purchaser can
Once your deal is accepted, get it in
writing immediately. Find your buyer or arrange financing
and get the deal closed. You don't want anything to happen
between the acceptance and the closing to make you lose your
Take the time to know what your rights are
in the foreclosure process; it is possible to use the loss
mitigation process to get back on track with your mortgage.
Lenders ultimately want to keep the home owner in their home
and it is up to the home owner to show that they will be
able to catch up or maintain the mortgage payment in the
Today's lenders have more foreclosures
than ever. They don't want properties, and as a result are
very willing to help, if the documents and numbers make
Treat them with the respect they deserve
and you might be surprised what might happen!
If you would like more information on this
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"You are who you are and where you are because of what you
have put into your mind."
For more information or pricing please do not hesitate to
call or e-mail. I can be reached at (508) 595-9567.