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Be Nice to the Bank Loss Mitigator!

A Loss Mitigator is an individual who helps homeowners stop foreclosure. Loss mitigators either work directly for the Loss Mitigation Department of a bank or lending institution, as a representative for the lien holder, or an independent agent who works strictly for the best interests of the homeowner.

The main function of a Loss Mitigator is to devise a plan that will allow the homeowner to remain in their home. One of the most common options Loss Mitigators present to homeowners is known as Loan Modification. This type of arrangement allows the homeowner to make partial payments for past due payments and extends the loan terms.

When loss mitigators devise a loan modification plan they work with the lender to obtain lower or fixed interest rates, extended terms and deferred payments. Oftentimes, the unpaid monthly payments are placed at the back of the loan, meaning the homeowner will wipe their current past due balance clean. However, they will have to make payments on their mortgage note for an additional one to three years.

If the homeowner is unable to meet the financial obligations of a loan modification, the loss mitigator can assist the homeowner with other options. These might include a Deed in Lieu of Foreclosure or a Short Sale.

It's important to remember that Loss Mitigators do not make the final decision to accept or deny a loan modification, foreclosure or short sale offer. Their main function is to organize and prepare information on the homeowners behalf, help identify red flags that could disrupt the process, and submit information to the lender. A professional loss mitigator will work with both the homeowner and lender to find an alternative to foreclosure.

Take time to know your rights in the foreclosure process. Doing so, may make it possible to use the loss mitigation process to get back on track with your mortgage. Keep in mind that lenders want homeowners to keep their homes. However, it is up to the homeowner to provide proof that they will be able to catch up or maintain their mortgage payment in the future. Valuable information about loss mitigation options can be found on the Federal Housing Administration website at

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Published on February 25, 2008 at 10:03 PM | Comments: 1

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If you have to get a mitigator, I would recommend getting an independent agent. They tend to look out for your interests more so than the banks.

FHA Loan Lending | September 10, 2010 1:42 PM


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