Stop Foreclosure through Loss Mitigation Process

Stop Foreclosure through Loss Mitigation Process

Information on how to stop foreclosure through the loss mitigation process.

To prevent foreclosure, contact an organization that specializes in stopping foreclosure, those organization have many programs that could help a homeowner from foreclosure. Most foreclosure assistance organizations will suggest the “Loss Mitigation Process” to stop foreclosure .

The "Loss Mitigation process" which the American federal government has established along with the mortgage industry to help Americans. To stop foreclosure, professional loss mitigators will review the homeowner's foreclosure situation, analyze the lender's loss mitigation policies and assess the homeowner's personal finances so that they could determine which loss mitigation options will help the homeowner save his or her home.

These are loss mitigation options that are available to prevent foreclosure are:

Loan Modification- If appropriate measures are taken, modifications of the loan, specifically the modification of the terms of the homeowner's mortgage, could be done to stop foreclosure. Extension of the term of the loan or lower interest rate can be considered also. To be eligible for a modification the homeowner should have current property taxes and is participating in an approved payment plan with the taxing authority. Loan modification is available for a very limited number of VA( Veteran Affairs) loans and it should be approved by the lender and/or investor.

VA Loan Modification/Refunding- This option needs at least 30 days to process and available only for VA loans. When the homeowner's loan is bought by the VA from the lender this is called refunding. When the VA has bought the homeowner's loan from the lender to stop foreclosure, options that were not available during the previous lender's term could be available for the homeowner to stop foreclosure, because in refunding, the VA will be more flexible in terms of stopping foreclosure as compared to the homeowner's lender.

Short Payoff- If the homeowner needs to sell his or her property to avoid default loss or to stop foreclosure, the lender may be able to grant that through the short payoff, however, the buyer should be qualified.Borrower should pass the hardship test that most lenders give the borrower like if the borrower or an immediate member of the family of the borrower has a catastrophic illness, or the spouse of the borrower has died and they have insufficient income for the payment of the mortgage. Another qualification that is required by the lender from the borrower is his or her overall financial condition.

Deed-in-Lieu of Foreclosure- For those homeowners who needs to sell his or her house to stop foreclosure and his or her property has been on the market for three months or 90 days, that homeowner is eligible for the deed-in-lieu foreclosure option provided that the homeowner has completed the financial package and provided a copy of the active listing agreement.

Repayment Plan- This option is for those homeowners who are past due for two or more months in their payments, financial status and the ability to pay for this plan is a must in order for the homeowner to be approved for this option.

Special Forbearance- This option is the division of repayment for 12 to 18 months; this could also be considered by those unemployed homeowners who want to stop foreclosure provided that they will be employed in the near future.

Partial Claim- For those homeowners who want to stop foreclosure and their loans are 120 to 365 days past due, the past due payments could be placed as a second mortgage between the homeowners and the Secretary of Housing Urban Development.

About Author

I am an SEO specialist who find article writing as a big help in increasing ranking. This way, writing and posting informative articles will help not only increase websites traffic but as well help readers have the knowledge regarding the topics being tackled....

Article Source: http://www.1888articles.com