Homeowners are losing their homes at record rates with no end in sight. They often believe the answer to their prayers is refinancing their home and getting away from their current lender. However, they need to be very careful if they are relying on refinancing as the way to save their home from foreclosure. By the time their properties have gotten into default, they have missed at least 2 months of mortgage payments. Not paying a mortgage for 2 months or more is detrimental to a credit score and thus, they cannot qualify for refinancing the loan.
The only viable option for most of these homeowners is Loss Mitigation. Loss Mitigation is a process in which lenders help borrowers that are in danger of default, avoid foreclosure. Every homeowner's situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Before a foreclosure or bankruptcy occurs after a one or two months default, a repayment plan may be proposed to the delinquent mortgage holder by a Loss Mitigation specialist to satisfy the amount owed to a bank or lender.
Many banks and lenders want to avoid the foreclosure process since, on average; both homeowner and lender stand to lose tens of thousands of dollars. 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.
Borrowers must be encouraged to retain home ownership through scenarios that provide the borrower and lender with an optimal outcome.
Unfortunately, in most cases, the home owner gets stonewalled at the first level, and sadly the first tier in Loss Mitigation is really a glorified collections department. By hiring a third party Loss Mitigation negotiation company, the homeowner's best interests can be fought for. In reality, a Loss Mitigation workup is in the lenders best interest as well taking into account the amount of money they stand to lose during the foreclosure process.
Loss Mitigation is the art of negotiating, on behalf of the homeowner, with the lender, stopping the foreclosure process, and coming to a settlement. Loss mitigation is often the better choice for the homeowner that is trying to save their home from foreclosure.
When Loss Mitigation isn't a viable solution, other options are available to create win-win strategies with the homeowner and can be employed to help the homeowner avoid the foreclosure, bankruptcy and 10 years of bad credit.
About the Author... My name is Kim Patrick, and I have worked as a Loan Officer in the mortgage industry since 1994. I have helped countless people, over the years, achieve their goal of homeownership. I am a Financial Advisor, and regardless of whether or not my customers are first time homebuyers, or experienced homeowners, I look at their whole financial picture and make recommendations on how they can best achieve their financial goals. My goal is to help folks who have credit "issues", as they call them in my business, find their way out of the proverbial "paper bag" and achieve the American dream of owning their own home. If you want to read more articles like this please visit my blog at http://creditrepair4u.wordpress.com |
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