Loss mitigation programs are win/win strategies
established by the federal government and the mortgage
industry in order to resolve foreclosures in a way that
benefits both the banks and the distressed homeowner,
mitigating the losses to both.
When the process is successful, it stops the
foreclosure and saves the home of the distressed
homeowner.
When it is not successful, the only realistic
alternative is for the homeowner to leave the house
before it is foreclosed on by the bank. Filing a
bankruptcy is good for a 45-60 day delay, but it is not
a permanent solution to foreclosure.
The Loss mitigation procedures and programs are still
not known or utilized by many homeowners. Many will just
put their head in the sand and hope things will
magically get better.
Others may attempt to negotiate with their lender
themselves, which for most inexperienced people is like
trying to build your own house, it is possible but not
likely you will have a good outcome.
You will get the run around. You are probably talking
to someone in India or China or Mexico. Send in your
paperwork, they tell you. Only, you can never find that
person to talk to again and nobody else has even seen
your paperwork.
When you finally do get through to someone at the
bank, you will probably end up in the collections
department. What kind of plan do you think you will be
offered by someone who is trying to get a cut of the
money he is trying to get you to pay?
The most common plan offered will have you "send in
1/2 of the arrears" and increase your monthly payments
by 50% over the next 6 months! That ain't hardly no loss
mitigation!
You may take a stab at representing yourself, only to
fail and have to start all over again with the clock
ticking, loudly.
Even if you get to the right person in the loss
mitigation department, you may say the wrong thing,
simply because you do not know the parameters. "How much
do you make, Mr Smith?"
Well, you already figured that out. You knew you get
paid every Friday, $500, so you make $2,000/Mo so you
blurt out, "I make $24,000 year." "OK, what are your
monthly expenses?"
The loss mitigation guy does his calculation and
informs you that you are close, but you would need to
earn $25, 500 to qualify for the mortgage modification
that would put all your arrears on the end of the loan
and save your home.
Actually, $500/week is $25, 800 year, because there
are 4.3 weeks in a month, not 4!
What you need is a professional loss mitigation
expert working for you, negotiating for you.
There are many options to pick from to save your
home, among them are:
- Repayment Plan
- Special Forbearance
- Loan Modification
- VA Loan Modification/Refunding
- Partial Claim
- Foreclosure refinance
- Government Grant
How many of these loss mitigation options are you
familiar with? What is the minimum amount of months in
arrears do you have to be before you qualify for a
Special Forbearance? The maximum? What is the required
amount of cash do you have to come up with in order to
get a loan modification? Which type of mortgage is never
eligible for loss mitigation?
You need an experienced pro going to bat for you,
don't you think?
Now, beware, there are reputable companies and there
are charlatans. Be sure you review their website and
examine the credentials of any company before you send
any money. Money? Yeah, the fee will cost you about 1
month's mortgage payment.
You need someone who knows how the game is played,
who to talk to at your lender and how to reach him,
consistently, has a heck of a better chance of
negotiating a successful resolution of your problem than
an inexperienced amateur, wouldn't you say?
Don't get embarrassed, get help!
Equal Housing
Opportunity (c)
Copyright 2008 #1 American Financial
(1AmericanFinancial.com)