A loss mitigator is a specialist who works with homeowners facing foreclosure. Nearly every lending institution has a Loss Mitigation Department to assist homeowners struggling to maintain their mortgage payments. The primary function of loss mitigators is to review mortgage notes and determine if they can help homeowners save their home from foreclosure or if it will be necessary to initiate the foreclosure process.

Typically, a loss mitigator works directly for a bank or mortgage lender. However, there are also independent mitigators who act as a representative of the bank, or work directly for the Borrower. A bank loss mitigator is assigned to review accounts of Borrower's facing foreclosure. Mitigators work directly with the homeowner to assist them in resolving their delinquent account. Depending on the circumstances which caused the Borrower to default on their mortgage note, Loss Mitigators might offer loan modifications, short sale approvals or move forward with foreclosure proceedings.

In order to determine which option is available, the homeowner must contact their lender and ask to speak to someone in the Loss Mitigation Department. Prior to contacting loss mitigation, organize financial documents including pay stubs or proof of income, current year tax return, list of expenses and a proposed repayment plan. It is also a good idea to create a timeline of events which caused the mortgage delinquency.

Loss mitigators are more willing to assist individuals who have become delinquent on their mortgage note because of chronic health problems, disability, loss of employment, death or loss of a spouse. The majority of loss mitigators do not have much empathy for Borrowers who became delinquent because they cannot control their spending habits and use credit cards to purchase frivolous and unnecessary items.

When working with your lender during pre-foreclosure, do not lie about the situation that caused you to fall behind on your mortgage payments. If you can't handle your finances, it's best to own up to it from the start. You will be required to provide documentation of your expenses. Don't blow your chance for saving your home from foreclosure by fabricating a story.

The most common option presented to homeowners facing foreclosure is known as Loan Modification. This type of arrangement allows Borrowers to reduce or temporarily suspend mortgage payments. Delinquent payments might be rolled over to the end of the mortgage loan.

Some lenders might accept partial payments for two or three months and roll over the balance to the end of the note or allow you to pay the difference over a specific period of time. If you qualify for a loan modification, be certain you can meet the conditions. Otherwise, you will end up in the same situation in a short period of time.

If you do not qualify for a loan modification, the loss mitigator can assist you with other options. These might include a Short Sale or Deed in Lieu of Foreclosure. Certain criteria must be met before a lender will agree to a short sale. The main requirement includes not having any equity in your home and owing more on your mortgage note than the home is worth.

With a Deed in Lieu of Foreclosure, the homeowner must return their home to the lender. In order to qualify for this type of transaction, loss mitigators 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 detrimental to your credit history.

Keep in mind a loss mitigator can make or break your real estate deal. It is crucial to be respectful and patient as you work through the process of trying to save your home from foreclosure or receive approval for a short sale. Take time to know your rights in the foreclosure process. Doing so will make it possible to use the Loss Mitigation process to your best advantage.

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