Loss Mitigation Loan Modification Information

Loan Modification for your mortgage payments Can it Help?

Now you can get a loan modification help for your mortgage, now you can lower your monthly payments to what you can afford.

With the increasing rise of foreclosures and distressed homeowners needing a solution, the real estate industry has been hit with many homes going back to the bank. For those who want to save their home, loss mitigation companies have come to the rescue.

Offering to lower monthly payments and help homeowners with adjustable rate mortgages. A new crop of specialists and consultants have come on the scene to cash in on the commissions, referral fees and profits of negotiating a deal through loan modification efforts.

Interested in starting a new career recession proof in this field?

Some sites offer certification, while others say that this is not a well regulated certification. One company that I have noticed that has a large training, certification and support system is Freedom Foreclosure Prevention Service. They have an affiliate site by which you can join up under another member and watch videos and see a webseminar.

How to get started as a Loss Mitigation Consultant

You will find this program among many being offered online, so here is a review of the system. The Tuition Fee for the Loss Mitigation Consultant Unlimited Access to the Online Support Center and Training, 8 Professional Websites and Fully Automated "Real Time" Case Tracking System, All Necessary Documents and Forms Lifetime Subscription to Premier Website Package -Loss Mitigation is the tool to get you in the front door of Real Estate Investing. Become trained as loss mitigation consultants and help homeowners save their home from foreclosure.

Fixed refinance is what many mitigation mortgage professionals offer persons about to loose there homes.

Many articles can be found about becoming a certified loss mitigation consultant, most of them charge a fee for the training materials, ebooks or videos. The official website is: http://www.freedomforeclosure.com/home

What is a Loan Modification and Short Sale or Short Refinance?

Loan Modification This is a process whereby a homeowner's mortgage is modified and both lender & homeowner are bound by the new terms. The most common modifications are lowering the interest rate, reducing the principal balance, 'fixing' adjustable interest rates, forgiveness of payment defaults & Fees, or any combination of these.

Short Sale This is a process whereby a lender reduces the principal balance of a homeowner's mortgage in order to permit the homeowner to sell the home for the actual market value of the home. This specifically applies to homeowners that owe more on their mortgage than the property is worth. With out such a principal reduction the homeowner would not be able to sale the home.

Short Refinance This is a process whereby a lender reduces the principal balance of a homeowner's mortgage in order to permit the homeowner to refinance with a new lender. The reduction in principal is designed to meet the loan-to-value guidelines of the new lender (which makes refinancing possible). Deed in Lieu of Foreclosure This is a process whereby the lender releases the homeowner from the obligations of the mortgage in exchange for the Deed to the home.

Cash For Keys Negotiation This is a variation of the Deed in Lieu of Foreclosure. The difference is that the lender will actually pay the homeowner to vacate the home in a timely fashion with out destroying the property. The lender does this to avoid incurring the additional expenses involved in evicting such homeowners.

HOMEOWNER BENEFITS The most common benefit to the homeowner is the prevention of Foreclosure. This is accomplished because Loss Mitigation works to either relieve the homeowner of the mortgage obligation or it works to create a mortgage resolution that is financially sustainable for the homeowner. LENDER BENEFITS Lenders benefit by mitigating the losses they would incur through foreclosing on the homeowner. Immediate foreclosure creates a tremendous financial burden on the lender. Loss Mitigation allows the lender to take a lesser loss right now in order to avoid the much greater losses caused by such foreclosures.

Many want to know what the History of Mitigation is and the causes

Loss Mitigation has been around for decades but has experienced a renaissance since 2007. This rebirth has been a response to the dramatic increase in foreclosures nationwide. These foreclosures have been caused primarily by a stagnant economy, a decrease in home values, the Credit crunch and the Mortgage Meltdown. These factors have worked together to create a record number of homeowners that have a need for Loss Mitigation services.

Mortgage Meltdown

Mortgage Meltdown Beginning in 2007 the mortgage industry nearly collapsed. Large numbers of lenders went out of business and the rest were forced to eliminate all of the loan programs that were most prone to foreclosure.

The elimination of these programs produced what is now referred to as the Credit Crunch. Credit Crunch Faced with mounting losses from foreclosures lenders were forced to tighten lending guidelines. This means people that were able to previously qualify for loans are now unable to do so.

Many of these people are in risky subprime, adjustable rate & option arm loans that are prone to dramatic payment increases; with out the ability to refinance out of these loans the only answer for many is foreclosure or Loss Mitigation.

Decrease in Home Values The Credit Crunch has created a market where you have far fewer qualified borrowers than there are homes for sale. When there's less demand the prices drop. This has lead to a real loss of equity for every homeowner in the country. With less equity homeowners are less likely to qualify for a loan that will refinance them out of a risky loan; with less equity less homeowners are able to qualify for Home Equity Lines or 2nd Mortgages in order to pay for financial emergencies.

So the cycle has become very circular in that foreclosures are now creating more foreclosures. Negative Equity For many homeowners the loss of equity has been extreme enough to cause Negative Equity. Negative Equity is when the home is worth less than the amount owed by the homeowner.

This has created a situation for homeowners wherein their home, which was previously their most valuable asset, is no longer an asset at all. Such homeowners are more and more frequently 'walking away' from their mortgage obligations and letting the home go into foreclosure.

How Long Will This Market Last?

Many experts have predicted that the nation will face dramatic levels of foreclosures until 2013. This is because foreclosures have been closely tied to the adjustment dates of certain types of loans (specifically, to Subprime Adjustable Rate Mortgages and Option Arms).

How Mortgage Brokers offer Loss Mitigation Programs

Many brokers have diversified their offerings to include Loss Mitigation programs. Some well known wholesale companies include New Life Lending and the American Modification Agency. Network Marketing There are many companies that have used this situation to create network marketing companies that offer Loss Mitigation services. One example is Freedom Foreclosure. Realtors Realtors have been able to use Loss Mitigation to assist with the Short Sale of a property. This permits them to earn commissions on properties that are otherwise unsaleable. RISKS Loss Mitigation is a fairly new industry and as such it is not very tightly regulated. This has led to a notable number of unethical companies purporting to provide Loss Mitigation services. Homeowners should be aware that such companies do exist and are advised to avoid companies that offer 100% Guarantees or are not attorney-backed.

Resources:

1. A list of the better known lenders that have collapsed is available at www.ML-Implode.com
2. It was noted that home equity has fallen below 50% for the first time on record. This is one of many articles referencing this: http://www.usatoday.com/money/economy/housing/2008-03-06-foreclosure-record_N.htm
3. ^ Taken from an article posted by New Life Lending at: http://www.newlifelending.us/lossmitdetails.html

Retrieved from http://en.wikipedia.org/wiki/Loss_mitigation

To better understand Loss Mitigation it is typically an attorney-backed process of negotiation between a homeowner and the homeowner's lender. The attorney works to negotiate mortgage terms for the homeowner that will prevent foreclosure. These new terms are typically obtained through Loan Modification, Short Sale Negotiation, Short Refinance Negotiation, Deed in Liew of Foreclosure, or Cash-for-Keys Negotiation.