If you are facing foreclosure, the first thing you need to do is contact the Loss Mitigation Department of your mortgage lender. A Loss Mitigator will be assigned to your account and will work with you to determine what, if any, options are available to help you avoid foreclosure. The main function of a Loss Mitigator is to devise a plan that will allow the borrower to remain in their home.

Prior to contacting Loss Mitigation, organize your financial records and create a list of income and expenses, along with a proposed repayment plan. If you have the means to get caught up on your mortgage loan, your lender may offer you a Loan Modification or Forbearance Agreement.

Typically, loan modifications consist of rolling over past due payments to the end of the loan, or temporarily reducing monthly payment amounts. Oftentimes, the unpaid monthly payments are placed at the back of the loan, meaning the homeowner will wipe their current past due balance clean. However, they will have to make payments on their mortgage note for an additional one to three years.

If you are unable to become current on your mortgage payments, the Loss Mitigation Department may accept what is known as a Short Sale. This process involves selling the home for less than is owed on the loan. For instance, if you owe $100,000, the lender may allow you to sell the home for $95,000.

Short sales can be somewhat tricky, so it’s a good idea to work with someone familiar with the process. It’s also important to note that the IRS may charge tax on the difference between what was owed on the house and what was received. Using the example above, this means you might be charged tax on the $5,000 difference.

Currently, banks are only accepting about one out of ten short sale requests. The reason for such a low acceptance rate is the fact that many people do not submit all of the required documentation. Since it is the job of the Loss Mitigation Department to keep losses to a minimum, most won’t even consider short sell offers of less than ninety-five cents on the dollar. Many real estate experts suggest lenders will be forced into accepting sixty-five to seventy cents on the dollar in the near future. Reason being is the massive amount of foreclosure properties in America.

Finally, if you are unable to obtain a loan modification or short sale, the Loss Mitigation Department might allow you to give the house back to the bank using a strategy known as Deed in Lieu of Foreclosure.

In order to qualify for a Deed in Lieu of Foreclosure, you must exhaust all other options including attempting to sell your home. While this arrangement will not save your home from foreclosure, it is not nearly as damaging to your credit report.

If you are facing foreclosure, take time to become familiar with the options available. Doing so can help you better negotiate with the Loss Mitigation Department. Keep in mind that lenders want borrowers to stay in their homes and make their mortgage payments. If you make a concerted effort to bring your mortgage payments current and are willing to do whatever it takes to save your home, chances are good you can avoid the foreclosure process altogether.

By: Simon Volkov

About the Author:


Simon Volkov, private Real Estate Investor, helps individuals who need to liquidate their real estate. If you are facing foreclosure or would like to learn more about loan modifications, short sales or deed in lieu of foreclosure options, visit www.SimonVolkov.com

Thanksgiving

Here is another option to stop foreclosure. It is called Loss Mitigation, and every lender offers this to homeowners to save their home.

Loss mitigation means you have the right to contact your lender, and see if there is a way for you to get caught up with your home loan. If you present your case effectively, you will be able to qualify for a home loan workout plan.

However, this can be harder than it may seem at first. Lenders can make it tough to get to the right people to see if you can save your home with this technique.

The people you want to talk to are in the “Loss Mitigation” department of your lender. But many lenders don’t routinely route borrowers to that department until they’ve missed several payments.Until then, (like if you are only 30 or 60 days late) you might be dealing with the lender’s collections department, which typically offers one option…. pay up in full right now!!!

So if you have called the 800 number on your monthly mortgage statement, you are probably dealing with your lender’s Collection Department. Insure that you actually ask for the Loss Mitigation Department if you contact the 800 number on your mortgage statement. Once in contact with the right department, you will need to have a little a patience.

With the sheer number of homeowners facing foreclosure, it may take a little while to actually talk to a human. However, saving your home is well worth the wait. Persistence pays off; so continue to call until you actually talk to someone in the Loss Mitigation department.

By: Robert Spencer

About the Author:


Many homeowners facing foreclosure simply don’t know what to do. You can learn exactly what your options are, and what to do next. Take a minute and check this site out… It’s absolutely free.

http://www.helpforhomeowners.org/

Self Storage Investing

Historicly high foreclosure rates were caused by lack of controls on the lending institutions. Easy qualification of buyers and outright mortgage fraud engaged in greedy brokers undermined our financial lenders. Billions of dollars lent to high risk borrowers. All these loans were bundled together and securitized. The financial securities were bought by institutional investors, IRA retirement plans and even foreign investors. Homeowners who were qualified under optimist and unrealist criteria soon found they could not make the payments on their mortgage. Default notices were sent after a delinquent loan payment or two remained unpaid. Collection efforts were made until a decision was made to foreclose the loan. Attorneys representing the lenders sent hundreds and thousands of these foreclosure notices a month. Homes were sold at auction and the homeowners were foreced to move if they had not already moved on. Some of these homes sold at auction but most were retained by the lenders. These REOs represented poor lending practices and the FDIC rules came into play. Large reserves of capital had to be set aside as holding and management costs, as well as, costs to liquidate the asset. Naturally, many large firms failed and investors holding these securities lost huge amounts of equity. Our economy was dealt a financial blow that sent shock waves throughout the worlds financial markets. A homeowner in financial distress and feeling pressured by the bank should open communication with them. You should personally contact the lender by phone, fax, email or direct mail as soon as possible. Your lender must know what the problem is and how they can help resolve the problem. Many options are available in the early days of default. Absolutely, do not hide or avoid speaking with the bank. First, consult a professional. You may want to discuss this matter with an attorney. Other sources of help are foreclosure experts and others who are qualified in this area. Get all the advice you can. Do not hire anyone yet as your lender will be upset with you if repayment of your loan is not first considered. Second, by all means seek out help from any organization with means to help with your finances or management of your finances. Debt restructuring and asset protection can be obtained with experts and individuals willing to help. Simply tell your story with details of what you can do or not do. Important information you must provide is when you can provide funds, how much money, what terms and conditions you need as well as, other considerations. Get as much flexibility as possible for future renegotiation after your current situation is stabilized. Ask for more time to consider your options. Third, after considering your situation and all the information presented amkea decision of what you can do. Make a written plan describing all the tasks to be enacted. Schedule meetings with each party to the plan present your plan and get an agreement on something. Keep detailed records of the meeting and followup with a letter to recite the decisions made. Keep your emotions reined in and be objective even though these problems are very personal to you. Do not be fearful it is counterproductive. Ask for more time. Your situation will improve with time. Keep in contact with your supportive friends and others offering help. Keep active and avoid analysis paralysis. Keep looking for additional options to help keep your home and family secure.

These three steps are the beginning and may be adequate, but if you are still unable to keep your bills paid you will want to look for other methods. Homeowners who have the loss of a primary or a second income will have to seek more severe choices which may include the sale of their primary residence and uprooting of the family.