Do It Yourself Loss Mitigation

If you are facing home foreclosure, you have probably read or heard that you can stop foreclosure or avoid foreclosure with loss mitigation. You have also read or heard about "loss mitigation specialists", but you want to know about do it yourself loss mitigation.

Basically, "loss mitigation" is a term used by mortgage lenders to refer to their departments that deal with delinquent loans and that try to reduce the losses that the lender may suffer as a result of a delinquent loan. The term "loss mitigation" has been turned around to also refer to people or companies that try to help people stop foreclosure or avoid foreclosure.

You may wonder why would you want to help a mortgage lender reduce its' losses? Because, by helping your lender reduce its' losses, your lender may help you stop foreclosure or avoid foreclosure. Contrary to popular belief, home lenders do not want your home. They want their mortgages paid. Most home lenders will try to work with borrowers to avoid foreclosure and keep their mortgages.

So, just what can you do as part of a do it yourself loss mitigation process?

First, you need to talk with your mortgage lender because your lender may have programs that will help you. Your lender may be willing to delay a payment or even move a payment so that the payment is not due until the end of your mortgage payments. Your lender may be willing to modify your mortgage to lower your monthly payments. Your mortgage lender has options as long as you agree to the options.

Second, you can make proposals to your mortgage lender. If you want to keep your home, you need to show your lender how you will pay them. For example, if you are going to receive a certain amount of money from a specific source and just need time to get the money, you can ask your mortgage lender to delay foreclosure until the date that you will have the money. Note that if you do this and your lender agrees, but you do not pay your mortgage lender when you agreed to pay, your lender will never believe you again and your lender will never delay foreclosure again.

If you are not concerned about keeping your house, you can propose a "short sale" to your mortgage lender. A short sale is when you have a buyer for your home, but the buyer will not pay an amount large enough to pay off your existing home mortgage. Some home lenders will agree to a short sale and take less than the amount owed on their mortgage so that they can avoid the cost and expenses of foreclosure and the reselling of your home.

Another proposal that you can make is a deed in lieu of foreclosure whereby you offer to give your house to your home lender in exchange for your lender canceling and satisfying your mortgage debt.

As you can see, do it yourself loss mitigation is about you and your lender working together to solve a delinquent mortgage problem. If you can help your mortgage lender reduce its losses and stop foreclosure or avoid foreclosure, then it is a win win situation.

This is general information only and not legal advice. If you need specific information or have any questions of any nature whatsoever, talk with a lawyer licensed in your state.

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By: Steve M. Bingman

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