Before we answer the question What Is Home Loss Mitigation and The Mortgage Mitigation Process? lets clear up what Home Loss Mitigation means. Mitigation comes from Latin meaning to do soft. The modern meaning is to make softer, make less strong or less damaging. So mitigation of loss then means making loss less severe or damaging. When we are talking about home loss mitigation or mortgage mitigation this usually refers to the mortgage loss mitigation process that protects a lender's or mortgage owner's investment.
For the lender this is the action of making the loss on a mortgage less costly or less financially damaging.
For the homeowner this usually involves either hiring a loss mitigation specialist to renegotiate their mortgage or dealing directly with lender to avoid the mortgage foreclosure process.
What Is Home Loss Mitigation and The Mortgage Mitigation Process for a Lender?
While dealing with the lender's mortgage loss mitigation department may be free, as the name implies, you are dealing with the lender's employees and they have the lender's best interest at heart.
What Is Home Loss Mitigation and The Mortgage Mitigation Process for the Homeowner?
While your intentions are in your own best interest when dealing with your lender's loan resolution department, you may mistakenly think your best interests are being served best by dealing directly with the lender as it is "free".
Unless your lender is very helpful, you may be taken advantage of if you think this. For this reason here is where you should consider hiring a mortgage loss mitigation specialist who will represent you and your best interests.
Alright, So What Is Home Loss Mitigation And How Does The Mortgage Mitigation Process Work?
Now for the meat and bones of What Is Home Loss Mitigation and The Mortgage Mitigation Process? Mortgage loss mitigation works to renegotiate loan terms between the lender and homeowner to avoid the mortgage foreclosure process.
There are six main methods used in the home loss mitigation process with possible variations and combination.
What Are The Mortgage Mitigation Methods?
Mortgage Loan Modification: This is mortgage renegotiation and loan structuring to new terms that are a permanent change to the loan contract. This is usually done by any combination of the following to lower the monthly mortgage payment:
Lowering the interest rate
Converting variable to fixed interest
Converting an interest only loan to principal plus interest payments (this will increase payment amounts)
Extending the length of the loan (this will the overall cost of the loan)
A principal balance reduction
Forgiveness of payment default and fees, usually by tacking the default amount on to the back end of the loan to make the loan current.
Repayment plans, often proposed by lenders when a homeowner requests a mortgage modification but this is not really a mortgage loan modification and does increase payment amounts for a period of time.
Forbearance: This is a temporary mortgage modification of loan payments and there are several ways this can be done:
No or reduced monthly payments for a period of time. This could be followed by a repayment plan or loan modification.
Temporarily reduce the interest rate
Convert to interest only payments for a period of time
A principal forbearance where the principal balance is reduced but the amount reduced is still owed when the home is sold, refinances or due as a balloon payment at the end of the loan.
Short Refinance: This is where the lender does a principal reduction so the loan to value will allow another lender to refinance the loan.
Deed In Lieu of Foreclosure: Basically this is signing over title of the home back to the lender to be released from further obligation to the mortgage loan. If done incorrectly the homeowner would still owe the loan balance above the sale price when the lender does sell the home.
Cash For Keys: A variation on the Deed in Lieu of foreclosure where the lender pays the homeowner cash to move out without destroying the property. This avoids the expense in the foreclosure process and eviction proceedings.
What Is Home Loss Mitigation and The Mortgage Mitigation Process and How Can It Benefit You?
Your lenders loan workout can benefit you, but you must remember it is not a guarantee you will keep your home.
The intention of Home Loss Mitigation/Mortgage Mitigation Dept is to negotiate a solution for the lender, that owns an at risk loan, to make the mortgage current and avoid the costly mortgage foreclosure process thereby losing the least amount of income on his investment.
If you keep in mind you are presenting a solution that will help the lender financially, you can work out a solution that will also benefit you. If you cannot afford the loan even after a mortgage loan modification, forbearance or short refinance these are not options available to you and you have to use an option that includes giving up your home.
There is a Loan Modification Test Service that will run your mortgage through the same tests using the same databases your lender uses. You can see exactly what mortgage mitigation options make the most financial sense to your investor. You will receive a 12 page report that explains in simple terms exactly what loan modification or forbearance programs you qualify for right now. You will know within two days what home loss mitigation plans you should be submitting for. No mystery of what you qualify, no worrying for months wondering if you will be approved.
Use Every Tool You Can To Save House From Foreclosure
Yes do try to work out a home loss mitigation option that allows you to stay in your home but recognize when you need to let the house go.
There are times when foreclosure is the best financial solution for the lender. If foreclosure is the best way for a lender to cut his losses then you need to realize you can not keep your home.
So this is the time to negotiate a short sale with your lender, then if you can not sell, negotiate cash for keys with Deed in Lieu of Foreclosure as you last resort. Any of which are better than a foreclosure for both you and your lender.
If you wait to long to negotiate your options the only option left will be a foreclosure sale. You can just do nothing and be evicted from you home even when earlier it was possible to negotiate and keep your home.
There is HOPE For Homeowners
Something Can Be Done About It
That Answers What Is Home Loss Mitigation and The Mortgage Mitigation Process?
Run A Loan Modification Test To See All Your Mortgage Mitigation Options No mystery, no worrying for months wondering if you will be turned down for a loan modification. Find out now exactly what you qualify for and see a 12 page analysis of each mortgage mitigation option available to you.
Apply for No-Upfront Fee Hardship Loan Modification Find out for yourself. Apply for no-upfront fee hardship loan modification even if you do not qualify for the Government Making Home Affordable Modification Program. You may qualify for a No-Upfront Fee Hardship Loan Modification. (Currently available in California, Oregon and Washington)
DIY Modification Kit Are you looking for a DIY Modification Kit that will walk you through the entire process of modifying you loan? Then read on.
The Home Mortgage Loan Modification Blog The Mortgage Loan Modification Blog - Find out what's new on the site, stay up to date with the latest developments in Residential and Commercial Modifications as well as Government Mortgage Assistance.
Get Pre-Qualified For A FasTrac Hardship Loan Modification Pre-qualify for hardship loan modification even if you do not qualify for the Government Making Home Affordable Modification Program. You may qualify for FasTrac Hardship Loan Modification.
Mortgage Loan Modification Myths Exposed There are many Mortgage Loan Modification myths floating around. Get the facts. More homeowners qualify for a loan modification than lenders are letting on. Are you one of them?
Ask General Loan Modification Questions - Get Answers Get answers to your own Mortgage Loan Modification questions. See what other visitors have asked and their answers. What do you want to know or need help with? Got a situation you need help with? Just Ask.
Ask Wells Fargo Mortgage Loan Modification Questions - Get Answers Get answers to your own Wells Fargo Mortgage Loan Modification problems and questions, tell us your Wells Fargo horror story or just see what other visitors have asked and their answers. What do you want to know or need help with? Got a situation you need help with? Just Ask.
HOPE For Homeowners H4H Government Help To Stop Foreclosure This Government help to stop foreclosure is a short refinance that includes principal reduction and a new option that makes a short refinance more attractive to lenders/investors
Loan Modification Home Get real answers to the real questions on mortgage loan modification, government mortgage assistance, government help to stop foreclosure and other loan modification and foreclosure questions. Do I qualify for a loan modification? Can I save my home?
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