Bank Loss Mitigators
Bank loss mitigators are individuals who work with homeowners facing foreclosure. Typically, loss mitigators are representatives of the Loss Mitigation Department of banks and lending institutions. However, they might also be independent agents who work directly with the homeowner and assist in negotiations with mortgage lenders.
The primary duty of bank loss mitigators is to help homeowners devise a plan that will enable them to either remain in their home or obtain a short sale. Loss mitigators review the homeowner’s financial situation and help them determine which plan will be in their best interest.
If the homeowner has the ability to become current on their loan or make partial payments, bank loss mitigators will assist them in negotiating with the bank to obtain a Loan Modification. This type of arrangement may reduce or temporarily suspend mortgage payments or extend the terms of the loan.
For instance, if a homeowner is three months delinquent on their account, bank loss mitigators might devise a plan which allows the homeowner to pay an additional amount on top of their normal monthly payment until the delinquent amount is paid in full. Or, they might roll the three payments to the end of the loan, giving the homeowner the opportunity to get back on track.
If the homeowner does not have the financial means to become current on payments or pay additional funds on top of their monthly payment, bank loss mitigators can help the individual negotiate with the bank to arrange a short sale. In essence, a short sale means the bank will accept less than is owed on the mortgage. For example, if the mortgage balance is $170,000, the bank may agree to accept $150,000.
Although bank loss mitigators work with homeowners to save their home, they do not have the authority to accept or deny a loan modification or short sale offer. Instead, they help individuals organize and prepare financial documents, identify red flags that could delay the process and submit information to the lender.
Foreclosure is a tumultuous event that stirs up many emotions. Oftentimes, distressed homeowners take out their frustration on loss mitigators. This is one of the biggest mistakes you can make. It is imperative to be respectful and patient with the loss mitigator assigned to your case. If you are rude and disrespectful, the loss mitigator will not be very motivated to help you. In other words, they can make or break your deal so be nice!
There are many options available to help homeowners facing foreclosure. Take time to know your rights and educate yourself about the process prior to contacting your bank’s loss mitigation department. Doing so will help you be prepared and know what information you will need to have available in order to present your case to the bank loss mitigator.
Keep in mind most banks prefer to work with homeowners and avoid the foreclosure process. Valuable information about loss mitigation options can be obtained through the Federal Housing Administration (FHA). (www.fha.gov)
Published on April 23, 2008 at 08:53 AM | Comments: 1