Loss mitigation is the process of trying to stop a home foreclosure before it occurs.

The loss mitigation process can be led by an employee or representative of the lien holder or a third party that is working for the home owner.

It is often better for a disinterested third party to handle the situation as they can work with a lending company without any emotional feelings.

Loss mitigation was introduced as a collaborative effort between the federal government and the mortgage industry. The program was established to help home owners that were facing the loss of their homes due to delinquent payments. A professional loss mitigation counselor will work with both the home owner and the lender to avoid the possibility of foreclosure.

It is nearly impossible to complete a successful short sale without dealing with the loss mitigation department at the bank How you deal with loss mitigation department is critical to a successful transaction.

Some bank customer service reps may say that the bank does not have a loss mitigation department. Keep trying! They have the department you are looking for, just under another name. Ask if the bank has a work-out department, foreclosures department or short sale department.

There are several options when it comes to loss mitigation but the main focus must be to keep the home owner in their home. A loss mitigation professional will first seek to set up a loan modification plan or a repayment plan that is realistic for the home owner as well as agreeable to the lending institution. With the repayment plan, it is imperative that the plan be realistic when it comes to the home owners ability to repay the amount that is delinquent. Obviously there has been a prior financial situation so the solution must be beneficial to the homeowner.

Loss mitigation is about keeping the home owner in their home. If that does not seem like a possible out come, every attempt should be made to help the home owner get the most for their home as they possibly can hopefully avoiding a foreclosure sale. This may include deed-in-lieu of foreclosure or a short payoff if a qualified purchaser can be found.

Once your deal is accepted, get it in writing immediately. Find your buyer or arrange financing and get the deal closed. You don't want anything to happen between the acceptance and the closing to make you lose your deal.

Take the time to know what your rights are in the foreclosure process, it is possible to use the loss mitigation process to get back on track with your mortgage. Lenders ultimately want to keep the home owner in their home and it is up to the home owner to show that they will be able to catch up or maintain the mortgage payment in the future.

Today's lenders have more foreclosures than ever. They don't want your property and as a result are very willing to help.

Treat them with the respect they deserve and you might be surprised what might happen.

As in earlier articles we urge you get professional help with your particular situation.

More info on your stop foreclosure information search:

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