Loss Mitigation Program - A Set of Tools to Stop Foreclosure |
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By: H. Milla Posted: 2010-03-28 08:09:15 |
| Loss mitigation services can be defined as a third party who steps in to assist a distressed property owner with their mortgage commitment to the bank. Using a set of tools to stop foreclosure, the loss mitigation agent may perform a short sale to transfer the property to new ownership or may perform a loan modification to keep the owner in the property with a newly reconstructed loan.The loss mitigation service is a win-win for the financially strapped borrower, whether or not he or she wishes to retain the property, and also to the lending institutions that prefer to avoid a property seizure. In most cases, the bank does not want to take back the property and would prefer that a sound financial resolution can be made for late payments. REO properties cost the lender money with upkeep, property taxes and commission towards a new sale. So rather than panic in the face of late payments, be sure to exhaust all your resources from a loss mitigation professional.If you have suffered a loss in your income, due to any cause, the loss mitigation firm may suggest a loan modification. This service will shop around to various lenders for competitive mortgage deals to beat your current lender. Lower interest rates and 30 year fixed loans can replace a cumbersome mortgage, helping to keep many distressed borrowers in their homes. However, once a new lender has been located, the property owner is responsible to provide documentation that he or she will be able to meet the new mortgage payments. Be sure to collect all the paperwork your lender asks for and return the signed forms on time. Whenever a home owner falls behind on mortgage payments, the clock is ticking before a Notice of Default is filed. The loss mitigation agent is there to lead, but the borrower must be able to follow.An alternate route, for those who wish to walk away from the property, may opt for a short sale. This process takes a few weeks, so be sure to leave yourself plenty of time before a Notice of Default is served. The short sale puts the property on the open market and sells to the highest bid. In some cases, however, short sales are offered at bargain prices and the purchase price may fall short of the mortgage balance. If so, your lender may work out a payment schedule for you to pay the difference, allowing for a clean break with the property and no damage to your credit report.NOTE: By researching and comparing the best stop foreclosure companies in the market, you will determine the one that meets your very specific financial situation.Hector Milla runs the Cheap Stop Foreclosure Loans website - where you can apply for mortgage modification or a quick loan to avoid foreclosure. |
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