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Loan Loss Mitigation Facts & Fiction |
- Loan modifications are handled by a bank’s loss mitigation department. The employees of this department are trained to protect the banks assets, not to help you. YOU CAN VERIFY THESE INEFFICIENCIES ARE ACCURATE BY CALLING YOUR BANK’S LOSS MITIGATION DEPARTMENT, TAKE NOTES AND OBSERVE HOW YOUR INQUIRY IS HANDLED. In fact, they will purposely obstruct your efforts to modify the loan. Presently, they are overwhelmed and poorly staffed as they try to figure out what to do with the thousands of bad loans on their books.
- Mortgage holders who are 30-90 days delinquent are given preferential treatment by the banks. We do not encourage you to default, however.
- THERE IS NO GUARANTEE AS TO THE LENGTH OF TIME BANKS WILL BE OFFERING LOAN WORK-OUTS. Therefore, time is of the essence to ensure success with your situation.
- Definitions:
- Loan Modification: A new mortgage rate, time frame, or other terms and conditions are modified on an existing loan. In todays enviornment a loan modification that does not include a principle reset to within 15% of current market value is is ineffective in the long run and a borrower will likely redefault.
- Lien Modification: The mortgage lender modifies the existing loan, making it possible for the borrower to qualify for refinance with a different lender.
- Short Sale: The mortgage lender allows the house to be sold at a price lower than the mortgage owed, but this does not guarentee a release from the debt (NOTE). This is used as a last option to avoid foreclosure when other options are not available. Please be careful when considering this option, and make sure a qualified attorney reviews any settlement agreement prior to your acceptance. (This is a requiremnent of our company)
- Deed in Lieu of Foreclosure: When a house in saleable condition has been on the market for at least 30 days without selling, that bank may accept the deed to the property in lieu of foreclosure and "potientially" forgive the balance of the debt. Please be careful when considering this option, and make sure a qualified attorney reviews any settlement agreement prior to your acceptance. (This is a requiremnent of our company)
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