For many homeowners facing the loss of their home, hiring a loss mitigation company can make a great difference in reducing levels of stress and having the best chance to put together a plan with the lender. These kinds of professionals are able to negotiate with mortgage companies for solutions that allow homeowners to get out of the foreclosure situation and establish a reasonable payment plan going forward. However, it is important that homeowners know when to take advantage of the services of a foreclosure negotiation company, and when the chances of success may be low.

Especially if the bank has denied a foreclosure victim's repayment plan or loan modification application because that option had already been used but failed, the bank may not be willing to reopen negotiations. The question in that case should be, what makes the homeowners think any other company is going to be able to get a better result at this point? Loss mitigation companies may be able to speak with the bank, but if the homeowners' financial situation has not changed appreciably, then the exercise may just be a waste of time.

Unless the homeowners are somehow able to find a foreclosure help company that can assist them in obtaining more income or is willing to give them extra money to offer the bank, the professional negotiation company will probably not be able to make much progress. Of course, if the homeowners have come up with some extra money they can disclose this to the foreclosure assistance professional, who will offer the bank a higher amount. If this is the case, the homeowners may wish to consider loss mitigation as an option to save the home, but also contact the lender for any extra guidance.

But no foreclosure help company can work magic and put homeowners with no way to afford the loan back into their home. They will not be willing or able to force the bank or trick them into approving a repayment plan that the homeowners could not keep up with once before and will fail at again. (And any company specializing in this type of service that is willing to participate in fraud with the homeowner is probably one to stay far away from.)

The bank will just tell the company that the foreclosure victims had already been given a chance with a workout program and had not completed the plan as agreed, so the mortgage company is unwilling to do anything more to help. Then the loss mitigation company will be able to say they did their part in negotiating with the bank, even though they simply told the foreclosure victims what they already knew.

Thus, if the homeowners have fallen behind on their mortgage, established a repayment plan, and fallen behind again, there may be few options that even a negotiation help company could present. Thus it probably would not be a good idea to pay anyone else to give the homeowners a result they already have. If they were just deathly afraid of calling the lender and wanted to hire someone to work with them to stop foreclosure, and had not attempted working with the bank on their own yet, that would probably be an appropriate situation in which to involve a foreclosure negotiation professional. But if they have already tried negotiating with the bank, and have given them all of the necessary documents, there might be very little the loss mitigation company will be able to accomplish.

They may be able to pull out some new trick, but the possibility is pretty slim. The homeowners in such a case may be spending quite a bit of money on the assistance services just for a small chance another solution would present itself. Finding a company to work with the lender can present a great opportunity for homeowners to reestablish the mortgage payments and have a second chance to save a home, but entering into a plan should not be undertaken lightly. Breaking a workout solution will make it much more difficult to get another plan, regardless of who negotiates on their behalf.

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