Loss mitigation refers to a range of methods designed to help struggling homeowners get their mortgages back on track. The recent housing crunch brought an increased demand for loss mitigation services, especially in hard-hit areas like Southern California. This guide answers some of the most commonly asked questions on loss mitigation and foreclosure prevention today.
Who needs loss mitigation?
Anyone who has trouble making payments on their mortgage, even if it’s still current, can benefit from loss mitigation. Some banks will require you to be at least a few months behind before they can help, but it helps to know your options early on.
What kinds of loss mitigation are there?
There are several ways to go about loss mitigation, but some of the most popular are loan modification, short sale, and deed in lieu of foreclosure. A loan modification changes your mortgage to lower monthly payments, while a short sale lets you sell your home at a discount and use the proceeds as full payment. A deed in lieu is a “last resort” approach where you simply turn the home over to your lender, who considers the debt paid.
How do I get loss mitigation assistance?
The first thing you need to do is call your bank’s loss mitigation department, the service that deals with delinquency and other lending problems. Ask about the kinds of loss mitigation they offer and how you can qualify. Each bank has its own rules, so make sure to provide as much detail as possible.
Do I need representation?
It’s possible to deal directly with the bank’s loss mitigation office, but most people choose to work with an attorney. Loss mitigation attorney helps you get in touch with the right people and prepare your case to better convince your bank that you deserve assistance. Look for a loss mitigation attorney who has considerable experience, especially with cases similar to your own, and has the right connections to help you get things done.
How much does it cost?
The costs of loss mitigation vary greatly depending on the process and the borrower’s financial situation. Loan modification, for example, can cost anywhere from $800 to $8,000. There are also banks’ service fees, attorney fees, and courier fees to consider. The best thing to do is call up your bank and ask for an estimate of the total costs, and compare it with the amount you expect to save from your loss mitigation plan.
About the Author:
The Author is a Loan Modification Specialist, who writes on various Loss Mitigation related topics to help people understand the Loan Modification process and help them save their homes from foreclosure. For more helpful articles visit the author’s blog at http://loan-modification-assistance.blogspot.com