Loss Mitigation is the process where the loss mitigator proposes a resolution plan to the lender to bring the homeowner's delinquent mortgage payments current to save their home. The resolution plan is submitted to the lender for acceptance and approval where the homeowner can afford to make the mortgage payments and keep their home. The lender gets paid their mortgage payments until paid in full. The delinquency resolution process is a great pre-foreclosure alternative to bankruptcy or losing the home. It helps lenders save tens of thousands of dollars by permitting the homeowner to reinstate their mortgage delinquency. The foreclosure is dismissed and the homeowner is allowed to save their most valuable asset, their home. Nothing could be better for both parties....
Most loss mitigation companies let the bank dictate the resolution plan to their client. Then, either the homeowner can't come up with the Hugh down payment or higher mortgage payments. And, they end up losing their home anyway. On the other hand, LMSI designs a workout plan that the homeowner can afford and make the mortgage payments as agreed. Thus, our success rate is greater than most in resolving homeowner delinquencies.
The
Loss Mitigation Specialist role is to talk to the
homeowner and guide them through the online application
process. After LMSI receives the application, the
homeowner and associate are notified within 24 hours by
email of whether the homeowner is pre-qualified or
rejected. If pre-qualified, the associate is instructed to
get a loss mitigation package to the homeowner. After
homeowner has filled-out the loss mitigation package, it
is sent to LMSI where it prepared to send to the lender
for immediate negotiations. If all paperwork and the
required payment are received, LMSI commences the case by
contacting the lender with a workout plan for resolution
of the homeowner's delinquency. However, if the loss
mitigation package is incomplete, then it is the duty of
the associate to gather the missing documents or payment
and submit them.
A Shortsale in real estate occurs when the outstanding mortgage loans (liens) against a property are greater than what the property can be sold for. The lender is willing to agree to discount the mortgage in order to sell the foreclosure property to a third party buyer or investor. Especially, since the lender will have to spend more money to foreclose and resell the property than by discounting the mortgage loan. Moreover, the lender can end up with the foreclosed property as a REO (Real Estate Owned) property that it will have to be held, repaired, marketed and resold to even begin to get back their cost interest and profits. Finally, the lender is not in the business of selling defaulted real estate loans that are in foreclosure. Using our custom Shortsale techniques all parties benefit. The lender has their defaulted non-performing loan(s) paid off in full. The buyer or investor gets a great deal on a foreclosure property at a discounted amount (wholesale). And , the homeowner has his or her closing costs paid, real estate commission paid, the loan paid off in full to avoid liability, no deficiency judgment, stops the trustee's sale, avoids foreclosure, saves his or her credit rating, avoids bankruptcy, and begins a fresh start. Hence, a Shortsale is a win/win/win situation for all parties involved - the homeowner/lender/and associate.
Simple. "Loss Mitigation Shortsale Institute" is about helping and assisting the homeowner in their "Best interest." This means that if the homeowner qualifies for loss mitigation, then we would help and assist the homeowner qualify for a workout plan with their lender to reinstate their mortgage loan. If the homeowner doesn't qualify for a workout plan and is going to lose their home anyway, then we would help and assist the homeowner in a Shortsale of their property. Our company's policy, the federal lending laws and real estate disclosure laws require us to help the homeowner in their best interest. We aren't about stealing the homeowner's properties in a pre-tense of helping and assisting them. There are plenty of homeowner's that aren't going to qualify for a legitimate hardship of their property and subsequently are going to lose their homes in foreclosure. These people are going to need the services of a Shortsale and are the foundation of our business market.
Lenders aren't in the real estate business of buying and selling foreclosure properties. They aren't licensed realtors that are experts in getting rid of foreclosure properties. If the lender chooses to out-bid everyone at the trustee's sale and not let the buyer/investor buy the property at an extremely low price as the highest successful bidder, the lender is stuck with the property. Also, most trustees' sales are for all cash and require the buyer to purchase the property within 24 hours so the average buyer doesn't have time to get financing even if they did have the credit or financing. Our point is that only investors or the wealthy have the money to purchase these types of foreclosure properties at these public auctions. As a rule of thumb, most investors will only bid 50-70% percent of the After-Repaired Value (ARV) minus repairs = Maximum Allowable Offer (MAO) formula.
It's because of all of their "actual costs" they incur when they're forced to foreclose on a homeowner's property. A lender stands to lose a lot of money when it foreclosures on a property in foreclosure. Foreclosure properties include most of the following costs: (1) attorney's fees, (2) trustee's fees, (3) back payments, (4) court costs, (5) holding costs, (6) repair costs, (7) closing costs, (8) real estate commission, (9) property taxes and insurance, etc. The average conforming loans costs a lender approximately $30,000 to foreclose. A non-conforming loan costs a lender around $40,000-$60,000. You can see why it is very advantageous for a lender to cashout of a defaulted loan and gets a foreclosure property off of their books.
