Loss Mitigation Negotiating

The big secret that is not really a secret is that your home lender does not want your home. Certain people may tell you that your lender hopes that you will not make your payments so that your lender can get your home. This simply not true. Your home lender makes money on home loans, not by selling repossessed homes.

Because mortgage lenders do not really want your home, most lenders have set up loss mitigation departments to help people who are behind on their monthly mortgage payments. These loss mitigation departments are there to reduce the potential loss that could be suffered by your lender. Generally the loss mitigation departments have some discretion on how they can help you. Often they can give you more time to pay your payment, defer a payment until the end of the loan payment period, or modify your existing mortgage (if you agree to modification). They may accept a deed in lieu of foreclosure.

Loss mitigation negotiating is really nothing more than talking with your home lender to see if there is a way that you can pay your mortgage payment so that your mortgage lender will not lose money. Maybe you need more time to pay, maybe you need to skip a payment, or maybe you need a mortgage modification.

The first thing is to talk with your mortgage lender. Tell them your situation and see if they can offer you some help. Consider what your mortgage lender says and determine if it will or will not help you. If it will help you, accept and do what they offer. If it will not help you, make an offer.

If you do make an offer, be absolutely sure that you can do what you offer to your mortgage lender. For example, if they say that they are sorry, but that they cannot help, tell them that you can pay them on a certain day, that you want to avoid foreclosure, and that, if they add additional fees such as court costs and attorney fees, you will not be able to pay. Then they have to think:"should we wait several days to get paid and avoid additional costs, or do we go ahead and spend the money to foreclose?" Your home lender has to make a decision on what is best for them. And I believe that they will give you more time.

It is important that you be able to do what ever you offer to your mortgage lender. If you say that you can pay on a certain day, you need to pay by that certain day. If you don't, your lender will not believe you in the future. By the same token, if you do what you say you will, your lender will believe you in the future. And loss mitigation negotiating will be easier in the future.

This article is general information. If you have any questions of any nature about avoiding foreclosure, talk with a lawyer licensed in your state.