Loss Mitigation - Process that helps in Avoiding Foreclosure

Sam

Loss Mitigation is a process by which a borrower can avoid foreclosure with the help of the lender. The lender develops a suitable plan for the borrower who has been unable to make all loan payments and is likely to default on the loan.

Usually lenders provide the following loss mitigation techniques.

Special Forbearance:
In this process, the lender develops an alternative payment plan based on the borrower's income level and credit profile. He may also allow for a temporary reduction or suspension of the payments. Know more...
Mortgage Modification:
The lender may reduce the monthly payments and even extend the term of the mortgage.
Partial Claim:
The lender obtains a one-time payment from the FHA insurance fund to bring the mortgage current.
Pre-foreclosure Sale:
The borrower sells off his property for an amount less than the outstanding mortgage balance and thus avoids foreclosure. Know More...
Deed-in-Lieu of Foreclosure:
The borrower hands over the property to the lender. This, however, does not damage the credit rating of the borrower as much as foreclosure does. Know More...

The options given above provide various ways by which a borrower can prevent foreclosure and thus save his property from being taken over by the lender. But he will have to meet certain requirements in order to qualify for any of the above loss mitigation techniques.

Related Reference

How to Avoid Foreclosure

Guest 0.10 Dollars($)

i would like to know how much amount of money one has to come up within few time as the initial contribution for a repayment plan like forbearance or mortgage modification in oreder to avoid foreclosure process??

jameshogg · Posted: Thu Sep 21, 2006 1:13 pm Post subject:

Hi Andrew,

Your question has been answered on this page, kindly have a look:
http://www.mortgagefit.com/know-how/about5037.html

Thanks
James

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