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jeffc762 · Joined: 19 Dec 2007 Posts: 3 2.55 Dollars($)

Is loss mitigation a good idea for someone like me who cant keep up with the payback plan the mortgage company sets up? I'm running out of options and have been talking with an independent specialist who seems to think he can get the mortgage company to push back the missed payments to the end of the loan. Are these specialist usually successful, and is it true the mortgage company is legaly bound to negotiate with a third party?
Thanks

michelle · Posted: Wed Dec 19, 2007 9:08 pm Post subject:

Welcome to the forum jeffc762

Has your situation changed since you intially entered the re-payment plan? If so, that could definitely help in negotiating with the lender. If not, I am curious as to why you entered the agreement knowing it would not be a good solution.

As far as your question is concerned, yes, loss mitigation companies can be successful in helping arrange a work-out with your current lender. Their success will depend on many thing; the lenders willingness to work out a solution, how diligent the mitigation company really is, and your financial position - you must be able to prove that you have the ability to repay the loan under the new terms requested.

I am sure the loss mitigation company will not work for free so I need to ask - how do you plan on paying them? If you have the money to pay the company, you might actually be better contacting your current lender, applying the funds to your loan instead and negotiating the workout on your own. This can be a very time consuming and daunting process for you to handle on your own, but it is possible. If you do not have the money to pay a company, you definitely should try to do this on your own.

When you call your lender, you will most likely get a collections representative. Their goal will be to get you to agree to repay your past due amount over the next few months - they will take the arrears, divide it by the number of months they agree to and then add that to your current payment. That may not work for you. If not, do not take "NO" for an answer, insist on speaking directly with the loss mitigation department at your lender. They have the ability to spread the past due balance over a longer period of time or possibly even modify the current loan either by freezing your rate if it is set to adjust, or by actually adding the past due to the principal and re-amortizing the loan. This process can take anywhere from several weeks to months, so again, I stress that patience and persistence is key.

The other option, which is great for many people is to visit with a HUD housing counselor. They can provide assistance in negotiating with your lender. The service used to be free, but due to the overwhelming demand, I believe they too have begun to charge. Their charges are still much less than a loss mitigation company. The downfall is that they could be quite busy and it may take some time to get an appointment.

I am unsure as to whether a lender is required to negotiate with a third party so I will refrain from offering advise on that question.

Best of luck to you. Please let us know what other questions you may have so we can try to help.

jeffc762 · Joined: 19 Dec 2007 Posts: 3 2.55 Dollars($)

The payment to to the specialist is made by depositing the amount of one regular house payment into their escrow account, they use that to show the mortgage company I have put money down in good faith. If they are successful, that becomes their payment.

Thanks for your help.

michelle · Posted: Wed Dec 19, 2007 9:20 pm Post subject:

Wow, that was fast jeff.

OK - so did they(the loss mitigation company) discuss with you exactly what they are trying to accomplish with the lender? If so, please let us know so we can let you share our experiences. Some negotiations are quite simple and others are very time consuming so knowing your ultimate goal will let us know how to better advise you.

Most lenders really do not want your home, so it is in their best interest to negotiate. Many are cooperating more readily with the borrowers than in the past.

jeffc762 · Joined: 19 Dec 2007 Posts: 3 2.55 Dollars($)

Basically what happened was I fell behind on the payments by about two months. I set up a repayment plan, with the access funds going into the forebarence account. I fell off the repayment plan because it was too high. That made me fall further behind. They set me up on a new payment plan, even higher. The goal is to push the missed payments to the end of the loan, which will allow me to go back to making the regular house payment. The other option is to negotiate an amount that I can actually afford to pay each month.
The mortgage company is Litton Loan. I have no problem with the company itself, they have been more than patient and understanding. The problem is that they dont like to negotiate with me. I do think though that before I make a decision to go with this specialist I will ask to speak with Litton's loss mitigation dept. like you suggest.

michelle · Posted: Wed Dec 19, 2007 9:54 pm Post subject:

Jeff,

Thanks for the clarification. OK - I am very familiar with Litton. When you call them, you will definitely get the collections dept who make every attempt to get you to agree to pay the arrears in 3-6 months. They will be very persistent. Unfortunately, you will need to get through them to get to loss mitigation. To my knowledge (and I have helped several customer deal with Litton) the loss mitigation dept. does not even provide you with a phone number - it will ALWAYS go to the collections people who will tell you they can not transfer you, nor do they have a number to give you for loss mitigation. At that point, ask them to send an email or internal communication to that dept and request that they contact you. Give them a date, time and number so you can be sure to take the call. That may be the only way to get someone from that dept on the phone.

Do you have online access to your account? If so, that is your best bet. On the left side of the screen, you will see a tab which I believe is called payment arrangements. It will bring you to a form that you will need to complete with your income and monthly expenses and will go directly to loss mitigation. OR - just hit the contact button and send an email that you NEED someone from the loss mitigation dept to contact you about your loan.

If you can get through the collections dept. people, Litton is actually quite agreeable to many work-outs right now. The process can take a while though. They are only the servicing company of your loan. Depending on what you are requesting, they may need to take the request to a higher level, like asking the actual investors on the loan, for approval.

Posted: Thu Dec 20, 2007 6:31 am Post subject:

Thanks Michelle. I dont think I have a lot of time, they told me that on the 28th the loan will be referred for foreclosure. Do you think I am better off taking the agreement for now, and then talking to loss mitigation?

michelle · Posted: Thu Dec 20, 2007 11:03 am Post subject:

Jeff,

I really can not answer that question. If you think you can adhere to the terms in the agreement, then signing it might a good solution. As I do not have all the details of your financial situation and have not seen the exact agreement, I really can not advise.

If you have an attorney who can review the agreement, please do so. Otherwise you might be able to get some assistance through legal aid if you qualify.

I would recommend that if you have online access to the Litton acct, that you send them a msg today. Also, if they have given you terms to spread the past due over 3 months, call the collections dept NOW and ask them for longer spread and see if that makes the terms better until you can get a work-out completed through loss mitigation.

Please keep us posted on your progress and let us know what other questions you have.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Jeff,

"I am better off taking the agreement for now"
Are you talking about going for the foreclosure? If then I will suggest you to choose short sale as your loss mitigation option.

Foreclosure will hurt your credit much more than short sale. If you go for foreclosure your more than 300 points will be dropped and if you go for short sale, your points will be dropped only about 50 to 80. So consult with your lender and see if you can go for short sale.

Feel free to ask if you have nay further questions.

Thanks,
Larry

Posted: Fri Dec 21, 2007 1:32 pm Post subject:

Larry
I meant the payback agreement Litton Offered. I think I decided I am going to pay the payback agreement amount. I have requested loss mitigation to get a hold of me, no luck yet. I will continue to request.

The specialist I talked with didnt agree that the agreement was a good idea, but with the expiration date being the 28th (when it gets reffered to foreclosure), and me not knowing much about this I didnt want to take any chances.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Jeff,

Sorry for the late response. How is your situation now. Is your lender offered you any option to avoid foreclosure?

Please keep us posted and let us know about your situation.

Best of luck,
Larry

Guest

Hi i am not late on my payment i lost 40% of my income i am self employed i submitted hardship application the servicer has been working on my case freddie mac is the loan holder. I have excellent credit now my payment is due now, i have very little money left to pay them but i can . My question is my house is $50k below what i owe and my rate is very high, what can i do while i wait with the new hope program is there any benefit coming for me.

Niicss · Posted: Fri Mar 06, 2009 2:02 am Post subject:

Hi Kasey

As you have already applied for a loan modification, I think you should wait and check whether the lender agrees to it or not. If the lender agrees to modify the loan, then your interest rates will be reduced. However, it may increase the term of your loan.

Thanks.

Guest

Hi with this hope program will my priciple be reduced along with the rate since my house is 35k below appraisal.

Guest

Hi
Loss Mitigation terms for struggling homeowners may not stem foreclosures as well as initially expected.The researchers said that more direct aid should be given to create a more positive impact.

For many lenders, according to the Loss mitigation Expert report, modifications do not always make more financial sense than foreclosures.

Thanks

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