Stop Foreclosure with Loss Mitigation Programs

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures. They help foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Our extensive experience and solid working relationships with mortgage lenders allows us help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender’s loss mitigation policies our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home and credit history through a variety of loss mitigation options:

REPAYMENT PLAN

If you have incurred a short term financial hardship and your loan is two or more months past due, your loss mitigation specialist will also consider submitting a request for a payment plan to your lender for approval. Only after reviewing your financial situation will this option be considered. All clients must be able to show that they can afford this plan in order to be eligible.  Click here if you want to talk to a loss mitigation specialist about participating in this program.

SPECIAL FORBEARANCE

(FHA loans only)(Type I and II)

If you have incurred a short term financial hardship and your loan is 90 days to 365 days past due, the loss mitigation specialist will also consider submitting a request for a special forbearance. A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Typical approval can result in spreading the repayment over 12 to 18 months. Type II - can be utilized in an unemployment situation whereby the promise of future employment is present. We have done VA loans that resulted 27-month repayment plans.  Click here  if you want to talk to a loss mitigation specialist about participating in this program.

LOAN MODIFICATION

If you have incurred a long term financial hardship, our office can assist you in supplying the appropriate information to lender to take the appropriate measures to modify the term(s) of your mortgage. This could lower the interest rate and/or extend the term of the loan resulting in lower payments. There are costs and fees associated with a modification that you will be responsible for. All property taxes must be current or you must be participating in an approved payment plan with your taxing authority to be eligible for a modification. Any additional liens or mortgagees must agree to be subordinate to the first mortgage. All requests are subject to your lender’s approval.   Click here if you want to talk to a loss mitigation specialist about participating in this program.

VA LOAN MODIFICATION/REFUNDING

A refunding is when the VA buys your loan from the lender. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate  Click here if you want to talk to a loss mitigation specialist about participating in this program.

DEED-IN-LIEU OF FORECLOSURE

If you have incurred a long term financial hardship and your house has been on the market (at fair market value) for at least 90 days, you may be eligible for a deed-in lieu of foreclosure. To be considered for this option, you must complete a financial package and provide a copy of your recent active listing agreement. Also, there cannot be any additional claims or liens (other the mortgage) against the property. If you are approved for a deed-in-lieu, you will be giving up all rights to the property and the property will be conveyed to your investor. In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights. You may be asked to participate in a Short Payoff program before a deed-in-lieu of foreclosure is accepted  Click here if you want to talk to a loss mitigation specialist about participating in this program.

PARTIAL CLAIM

(FHA mortgages only) (Some Freddie Mac Investor loans)

The loss mitigation specialist may assist in requesting a partial claim if you qualify. You may be eligible if your loan is 120 to 365 days past due. A partial claim results in placing your past due payments into a subordinate mortgage (2nd mortgage) between you and the Secretary of Housing Urban Development. The partial claim note will require you to start making payments when you pay off the first mortgage. There is no interest. The partial claim can be for no more than 12 months of past due payments.

Click here if you want to talk to a loss mitigation specialist about participating in this program.

Foreclosure is not the most cheerful thing to think about, but it is an element of reality every homeowner should be aware of and comprehend fully.

We fear what we don’t understand. The concept of "foreclosure" is frequently misunderstood and frequently feared. Understanding the concept of foreclosure with precision maximizes your ability to take action to improve your situation!

What Is Foreclosure?

• A legal proceeding which culminates in a mortgage lender selling or repossessing the home of a borrower who stopped making mortgage payments.
• A series of events that begins when a homeowner defaults — or stops making mortgage payments — usually because of a life crisis which impacted their income (examples: death, disability, divorce, etc.) or because their loan payments increased beyond their ability to pay them (example: when an adjustable rate mortgage begins to adjust). The series of events ends when the mortgage holder sells the home at auction, or takes the home back from the owner.
• HOMEOWNERS: Foreclosure starts when you are at least 90 days behind on your mortgage payment. Then, the foreclosure process is represented by a series of notices you get in the mail and even posted on your front door over a 4-6 month period of time telling you that you have two options: (1) either bring your past due mortgage current or come to some compromise with the lender, or (2) your home will be sold and you will have to move out. At the end of these notices is usually an auction, where the lender sells your home on the steps of the county courthouse or simply takes ownership of it, and you move out.Your options, rights and responsibilities change depending on what phase or stage of the foreclosure proceeding your home is in at any given moment.
• HOMEBUYERS: Foreclosure is a series of phases of "distressed" property ownership. During your house hunt, you might run into properties whose current ownership status is all over this continuum. Each place on the spectrum presents a different set of considerations — legally, logistically and from a bargaining perspective — impacting how desirable (or not) a property might be to you, as a buyer.

Bottom Line: When you buy a home using mortgage money, your promise to repay the mortgage loan is secured by the home itself. If you stop paying your mortgage for more than a 90-day period of time, the mortgage lender will set the legal wheels in motion to take the home back. Those legal wheels are, collectively, called "foreclosure."

NEXT: Learn the phases of the foreclosure process .