Loss Mitigation Blog

Many people have heard the term loss mitigation but most do not know exactly what this entails. Loss mitigation is the term used by financial companies for the department that handles bad loans, most notably bad mortgages. A loss mitigation specialist is a person who solves the problems of a bad loan.

A loss mitigation specialist can either work for the lender or as a representative of the borrower. Many debt settlement companies employ loss mitigation specialists to process mortgage loan modifications.

A loan modification is a process where negotiations are made with the lender to reduce the mortgage payments of the borrower to an affordable level. To qualify for the program you have to provide proof that your income has changed and you can no longer reasonably afford your current mortgage payment.

There are no credit qualifications or credit scores needed to qualify for the program, only proof that there has been loss of income. New programs have been established by the government that will allow a loss mitigation specialist to negotiate the terms of your mortgage so that the monthly payment does not exceed 31% of your monthly gross income.

There are many regulations regarding these programs. Deadlines must be met by both borrower and lender. Attachments must be made to the paperwork to document your financial data. The proper people must be contacted to make sure that the process runs smoothly. It is almost a game because specific rules must be followed to win.

These programs are available to help people suffering from a financial setback keep their home. A loss mitigation specialist knows and understands all these new laws and programs and can help you keep your home. You do not have to add the pressure of a pending foreclosure to your list of worries. When you are awarded a loan modification your loan becomes current again, protecting both your home and your credit.

No one purposefully gets into financial trouble, it happens from circumstance. There is help available though and using the help of a loss mitigation specialist can provide you a way to overcome these difficult times.