Preventing a Foreclosure Through Specialized Loan Servicing Loss Mitigation
One of the greatest fears property owners have is the fear of losing their homes. If you have been served foreclosure papers and you are uncertain about what to do, you do not have to be paralyzed with fear. Through a company offering specialized loan servicing loss mitigation services, you stand the best chance to prevent the foreclosure of your property.
The overall goal of loss mitigation is to develop a mutually beneficial plan to prevent the foreclosure of a home. It is a process that requires the services of professionals that work address everyone’s best interest. Ideally, loss mitigation should be conducted by an unemotional third party which has the experience, knowledge and skills to successfully deal with things in an objective and understanding manner.
Through the aid of this third party, every available measure will be explored to prevent the foreclosure. Loss mitigation specialists take into account the property condition and value, the owner’s personal circumstances and capacity to pay. The most common strategies include the refinancing of the loan with the current lender or a different lender or working together to implement a modification or forbearance plan. Here, an NMLS licensed loan mitigation specialist can work out a deal with the lender to defer or cancel the foreclosure as long as the borrower abides with a new set of loan terms.
In cases where the property owner does not qualify for refinancing or a loan modification, one option that can be explored is pre-foreclosure sale of the property. By cooperating, the borrower and lender can both achieve the best sales results. Other options include selling the home for less than what is owed (short sale or payoff) or arranging for forgiveness of the debt by turning the property over to the lender (a deed-in-lieu of foreclosure). It should be noted that there is no actual guarantee that the property owner can qualify for these options but you should explore every single option to achieve the best results. With all of these options, timing is crucial to achieve the best outcome.
It is important to note that loss mitigation entails the agreement between the property owner and the lender. Not all borrowers will qualify for options that would allow them to keep the property and not all lenders offer all of the programs listed above.
Here at Del Toro, we work with property owners and their lenders to find a suitable solution to issues to create a win-win situation for all parties involved. If you are a borrower in need of assistance, or if you are a lender who wants to increase the stability of their investments and stay compliant, click below to schedule a call with one of our representatives.