What Is Loss Mitigation – Loss Mitigation And Losing Your Home To Foreclosure

What is loss mitigation? Loss mitigation is essentially the loan modification help that you should get from your mortgage lender if you try to get your mortgage modified. Loss mitigation comes into play with your lender before you home is lost to foreclosure.
Believe it or not, your lender does not want your house, however they are interested in minimizing their financial losses on your mortgage if you having trouble making your mortgage payments for one reason or another.
Said in another way, loss mitigation can be thought of in the following two ways:

The Loss Mitigation Department is a department set up at most US mortgage lenders and banks mostly since 2006 when the mortgage and real estate crisis started. This department in general is designed to help the lender recoup, or minimize their losses on a mortgage (or other loan) that goes into default. It is the job of the department to minimize the financial loss for the lender once a loan goes into default but before it goes into foreclosure.

The Loss Mitigation department can do things like loan modification help, forbearance, loan workouts, principal reductions, approve short sales, among other methods to help the lender mitigate their losses on the money that they lend.
Loss mitigation is the process by which your lender will work with you to minimize their financial losses in the event that your mortgage goes into default. Go into default means that you have gone at least 3 months behind on your mortgage payment. The best loss mititation result for the lender is for them to find a way for you to keep your home and you keep paying as close to your original mortgage payment and balance as possible.

Related topics: Fix My Credit,  Loan Modification Help,  Refinance My Mortgage,  FHA Short Refi