Loss Mitigation - It can keep you from Foreclosure

Loss mitigation is what many people are turning to in an effort to save their house or their credit from a foreclosure.  As we all know by now foreclosure rates are really high.  With many people not qualifying to refinance their mortgage loss mitigation is their next best option.

The people who handle loss mitigation for homeowners:

1. Foreclosure lawyer
2. Representative at the bank who handles these matters.
3. Third party representing the homeowner.

Here are a few different options for fighting foreclosure.

• Loan modification – This is when the terms of your mortgage is negotiated and changed.  Banks usually offer you a short term fix to the problem.  As what they will do is give you six months at a lower payment then bring you back to normal level.  If you’d be given a much better scenario if you want with the lawyer or loan modification company.
• Short sale – A short sale is when the bank allows you to lower the balance in your mortgage so you can sell your home current market for the value.  If the bank doesn’t allow you to lower the balance will not be able to sell your home.
• Short refinance – This is when the lender allows the homeowner the balance of the mortgage, so they can refinance with another lender.  The loan mortgage balance is make sure the loan qualifies with loan to value ratios.
• Deed in lieu of foreclosure – This is when a homeowner and gives up the deed home at and the bank releases them from their financial obligation.
• Keys for cash – This is a type of deed in lieu of foreclosure deal. The bank will pay you to leave the house, as long as you don’t destroy it. The reason they would do this is because it will actually save them money in the long run over going through the foreclosure process.