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Loss Mitigation Programs That Stop Foreclosure!

 

 
 
 
Loss Mitigation Programs That Stop Foreclosure! 

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures. They help foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner's situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Our extensive experience and solid working relationships with mortgage lenders allows us help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender's loss mitigation policies our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home and credit history through a variety of loss mitigation options:

1. LOAN MODIFICATION 
(Available on a very limited number of VA loans with lender and/or investor approval) (Called Recast for FHA)

If you have incurred a long term financial hardship, our office can assist you in supplying the appropriate information to lender to take the appropriate measures to modify the term(s) of your mortgage. This could lower the interest rate and/or extend the term of the loan resulting in lower payments. There are costs and fees associated with a modification that you will be responsible for. All property taxes must be current or you must be participating in an approved payment plan with your taxing authority to be eligible for a modification. Any additional liens or mortgagees must agree to be subordinate to the first mortgage. All requests are subject to your lender's approval. 

2. VA LOAN MODIFICATION/REFUNDING 
(Available for VA loans only) (Need at least 30 days to process)

A refunding is when the VA buys your loan from the lender. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate.

3. SHORT PAYOFF
(Short Sale) (Pre-foreclosure Sale) (Compromise Of Sale)

If you have suffered a long term financial hardship and are unable to maintain your loan or if you need to sell the property to avoid a default loss on the property, it is possible that the lender may be able to accommodate you with a short payoff. A qualified buyer is required. If this is an option you wish to pursue, you must inform the loss mitigation specialist assisting you immediately. There may be tax ramifications associated with any short payoff or foreclosure; therefore, we recommend you contact your tax adviser for details. Some states permit lenders to seek a deficiency judgment for the amount the payoff was discounted. See your state's foreclosure law for more information. Check with an attorney for advice on your personal situation. 

4. DEED-IN-LIEU OF FORECLOSURE

If you have incurred a long term financial hardship and your house has been on the market (at fair market value) for at least 90 days, you may be eligible for a deed-in lieu of foreclosure. To be considered for this option, you must complete a financial package and provide a copy of your recent active listing agreement. Also, there cannot be any additional claims or liens (other the mortgage) against the property. If you are approved for a deed-in-lieu, you will be giving up all rights to the property and the property will be conveyed to your investor. In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights. You may be asked to participate in a Short Payoff program before a deed-in-lieu of foreclosure is accepted. 

5. REPAYMENT PLAN

If you have incurred a short term financial hardship and your loan is two or more months past due, your loss mitigation specialist will also consider submitting a request for a payment plan to your lender for approval. Only after reviewing your financial situation will this option be considered. All clients must be able to show that they can afford this plan in order to be eligible. 

6. SPECIAL FORBEARANCE
(FHA loans only) (Type I & II)

If you have incurred a short term financial hardship and your loan is 90 days to 365 days past due, the loss mitigation specialist will also consider submitting a request for a special forbearance. A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Typical approval can result in spreading the repayment over 12 to 18 months. Type II - can be utilized in an unemployment situation whereby the promise of future employment is present. We have done VA loans that resulted 27-month repayment plans. 

7. PARTIAL CLAIM
(FHA mortgages only) (Some Freddie Mac Investor loans)

The loss mitigation specialist may assist in requesting a partial claim if you qualify. You may be eligible if your loan is 120 to 365 days past due. A partial claim results in placing your past due payments into a subordinate mortgage (2nd mortgage) between you and the Secretary of Housing Urban Development. The partial claim note will require you to start making payments when you pay off the first mortgage. There is no interest. The partial claim can be for no more than 12 months of past due payments. 

 
 
 

 

 

C Thompson

Account Manager

Call me: 

Fax: 206-203-1890

Email me: keepyourproperty911@gmail.com

 

Comment balloon 5 commentsC. Thompson • August 31 2010 11:56PM

Comments

Very good summary of foreclosure avoidance methods. VA loans are particularly complicated because of partil loss of future eligibilty.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) almost 8 years ago

REFERED BY VICTOR WAKLER.

Posted by CHANTAY CORLEW almost 7 years ago
most local banks don't deal with home loans any more just the larger mogtare companies especially if you are a first time buyer.I think part of my problem is being rather young also because I went to a couple other banks after that and was basically told I probably didn't have enough credit to get one because I was too young.I found a realator that I knew (went to school with him so he was close to my age) and had him help me look for a house. He set me up with someone he knew that helped me with the financing and I had no problems!It may cost a lil money but maybe a realtor if you know one would be a good route because they know the whole deal about buying a house and are working for you and if they've been doing it a lil while may have "connections". Also consider getting a home inspection before buying even though it is a realitive .the house may have faulty wiring or pluming and know one knows it. It would be devastating to just buy a new house and then have to spend ALOT of $ fixing things you didn't plan on.
Posted by Yuu almost 6 years ago
Be very careful. Most of the time the leendr will be able to obtain a judgement for the amount of the difference between what is owed and what is actually paid off (after closing fees, real estate fees etc.) The leendrs have been succesful at even obtaining wage garnishment. In order sell and get a short sale approved, a hardship letter is required. The leendr is wanting actual details as to why your friend could make the payments before and now can't. Just be honest. Your friend will have to sign the short sale agreement- look to see if they will still be responsible for the short amount. Seek the advice of an attourney or real estate professional.
Posted by Beatriz almost 6 years ago
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Posted by Traficant ypm over 5 years ago

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