Loss mitigation, also known as the loss mitigation department, is usually defined as a third party working on behalf of a lender to help homeowners that are facing foreclosure. It is a division within a bank that mitigates (synonyms – relieves, alleviates makes something less severe) the loss of the bank, or a firm that handles the process of negotiation between a homeowner and the homeowner’s lender.

Loss mitigation works to negotiate mortgage terms for the homeowner that will prevent foreclosure. These new terms are typically obtained through loan modification, short sale negotiation, short refinance negotiation, deed in lieu of foreclosure, cash-for-keys negotiation, or a partial claim loan or other loan work-out. All of the options serve the same purpose, to stabilize the risk of loss the lender (investor) is in danger of realizing. Immediate foreclosure can cause higher losses for banks and lenders. A loss mitigation team or department can help ease the potential risk incurred by a lender by working out terms or loans that may be more manageable for a homeowner thereby limiting the amount of loss by either party.

It has been my experience that the loss mitigation department has a lot of red tape and is not an easily accessible group of people to speak with; in fact if you contact your lender and ask to speak to the loss mitigation department and are not already delinquent on a loan you will be passed around or deferred to someone else with in the bank.

If you feel that your home may be in jeopardy of foreclosure due to a job loss or some other financial crisis and want to go straight to the loss mitigation department to try and negotiate new terms, your chances are very slim that you will get through. Loss mitigation specialists do not negotiate on “potential” losses. By this I mean, if you sense that your debt or bills are spinning out of control and you would like to negotiate new terms with your lender BEFORE you default, trying to contact the loss mitigation department may be a futile effort. They only deal in “current risk”; homeowners that are already behind or delinquent in their loan payments. With foreclosures rates on the rise, the reality is that they barely have enough time to work through terms for homeowner’s whose homes are set to go to auction, also known as a sheriff’s sale or trustee sale depending on what state you live in.

If you as a homeowner end up behind in mortgage payments and receive a default letter or notice of delinquency from your lender chances are the signature at the bottom as well as the contact information for further assistance will be from the loss mitigation department.

Should you find yourself talking to a loss mitigation specialist like I did, you’ll need to be prepared if your intent is to try to workout a repayment option or loan modification. Everything you say during this conversation will be documented in your file. Now is not the time to contact your lender without some idea of your financial status. Being prepared will not only give your a better result when speaking with a specialist but will help speed the negotiations and give you a much better chance of success.

If the lender is willing to work out an arrangement with you, most likely you will be asked to send in all your current financial information, documentation as proof/cause for the recent delinquency and a financial hardship letter.

It is extremely important that you have some idea of what to pull together if you want a chance to save your home from foreclosure. Pulling together random bills as a snapshot of your debt WILL NOT be enough in most cases to get you the relief you seek nor save your home from foreclosure. You must be well prepared if you want to be considered for a workout option.

Believe me I know…I was turned down twice for assistance. The first time I was told I made too much money to be considered. The second time I was told I didn’t have enough income to cover the payments even if I did receive a workout plan. Meanwhile the clock was still ticking on my impending sheriff’s sale until I finally figured out what to do to stop the foreclosure and get a remodification that saved my home. Should you find yourself in a similar situation or facing foreclosure, I’ve made a video that takes you through my personal foreclosure story and explains in detail after weeks and months of research how I over came foreclosure and saved my home by working with my lender’s loss mitigation department.

If you’re interested in finding out How to Save Your Home from Foreclosure – like I did! Follow the above link to watch my 20 minute foreclosure video.

Most people hate negotiating! Do you? Some people are actually good at it, but most people aren’t. And, most of us do not like doing it at all. But, when your home is at stake, like when you are negotiating with the bank for a loan modification or other workout solution…it’s critical. And, you can be a much better tele-negotiator if you follow these nine rules. These are good practices that come from many years of tele-negotiating with opponents about foreclosure and debt settlements.

1. Control your ego Be sure to Listen twice as much as you speak. After all, that is why God made you with gave you two ears and one mouth! Talking, you give away information. Listening, you gain information and knowledge. Ask questions that lead to lengthy responses and listen a great deal.

Do like Lieutenant Columbo, the famous TV Detective. Avoid mind games with questions and listening your opponent into submission. “Do a Columbo” on them.

Think of the other party like your son or daughter. Don’t be condescending and don’t embarrass them.

2. Do not let rude behavior offend you. They try to offend you. They try to distract you and put you off-guard to make you want to get out of this situation at any cost and fast. Understand? Don’t succumb to it. Simply hang-up in the middle of a sentence. That is better than to lose your temper.

It always amazes me how difficult it is for well-mannered people to simply hang-up the phone on a collection agent. We keep trying to bring the conversation to a cordial close…that’s what civilized people do, right. Reject that notion. When you need to end the call, just do it with a “click”. Do it before you lose your cool.

3. Prepare before each Call *Understand strengths/weaknesses of yours and the opponent *Be clear about what is motivating your opponent *Understand what your alternatives are and what their alternatives are *Make goals for each encounter…just before the call *Time is on your side, so remember that. If you control the monthly payments, you are in control.

Number 4. Be sure to Be willing to “Fold-em”. I mean that you have to accept that sometimes things will not go your way and be willing to accept that and end the conversation poorly.

You will get the best settlements if you are patient and wait until the deal is just right.

5. Focus on the Agent – their pressures and their needs. Don’t focus on just your own needs. Remember, they need to close this file and move on to other files. Offer to fax to their personal number or to email directly to them. Always be prompt and complete on all your responses to their requests. Help them do a good little job!

Don’t intimidate or condescend. I find that these folks are easily offended and get defensive…I guess that comes from working with stressed-out, pissed-off people all day! Be nice.

Number 6. Always get something in return if you must give up something. Consider each item of every offer to be “won”, and don’t let go of any without getting something in return. The opponents record every item of the negotiations, and so should you.

7. Ask for what you want. I recommend asking for a specific dollar amount. Create some rationale around it (i.e. “it is 31% of my gross household income, or, it’s 31% of blah, blah, blah, blah, blah).

8. Never lie. It’s too hard to keep track of things that way! Plus, it’s just wrong.

Number 9. Be sure to write things down! “He who has information wins.” Keep great records of all things said…by whom and when.

Want to find out more about actually getting loan modifications? Visit Rockwood’s site about DIY Loan Modiification at Home Loan Modification

In today’s economy with the rapid rise of unemployment, hard working families struggling to sustain the “American Dream” are now faced with the probability of losing their home. Statistics indicate, 1 out of every 200 homes will be foreclosed on. With any passing day a person some where is looking for possible ways to save their home. When it comes to foreclosure, one of the most devastating oversight that people make is neglecting to openly talk with their lender about their situation. Sadly, homeowners often wait too late to make an effort to discuss a deal to save their home. The best thing to do is to educate yourself on the options available.

Fortunately, there are several different ways to actually prevent foreclosure from taking place. The fact of the matter is lenders are not in the business of taking anyone’s home. It is important to realize and understand that lenders don’t like to see homes to go into foreclosure. Lenders are in the business of lending money and for that reason would much rather have mortgage loans paid. As such, countless lenders are more than willing to work with homeowners to come up with a repayment plan to keep people in their homes if and when possible.

If you are looking at foreclosure you may be able to:

1. Reduce Your Monthly Mortgage Payments

2. Get Your Loan Modified

3. Short Sale Your House

4. Postpone Your Mortgage Payment

The above mentioned are just a few choices that may be possible, check with your lender and/or seek legal help from a loan modification attorney to attempt to work something out to prevent foreclosure. Some people think that it will cost them nothing to just surrender and step away from their home and let it go into foreclosure. The fact is foreclosure will involve money and will adversely affect your credit. Count the cost. Avoid Foreclosure.

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To learn more information on how to prevent foreclosure contact an experienced Loan Modification Attorney at Janian & Associates Today.

Over a period of five years or more, primarily during the real estate boom years of 2002-2007 over 2 million mortgage loans were funded. During that period, when real estate prices were going up at an unparalleled pace, there was so much competition among lenders to make high profit loans, that underwriting guidelines became practically non-existent. Lenders in their exuberance, greedily made loans to just about any borrower who could sign their name. Not wanting to be saddled with too much debt, the lender bundled and sold off the riskier mortgages before the ink dried.

Your loan may be unlawful, and you may be entitled to substantial damages whether or not you are currently in foreclosure. A forensic loan audit looks for violations of federal, state and predatory lending practices. Approximately 85% of forensic loan audits to date have uncovered violations in the TILA (Truth in Lending Act), Good Faith Estimate, RESPA (Real Estate Settlement Procedures Act), and in the Predatory Lending and Real Estate/Mortgage Fraud regulations.

What exactly is a forensic loan audit? A forensic loan audit is the comprehensive review of all documentation, legal paperwork, transaction data, and other evidence pertaining to a real estate loan that has already been funded. A Forensic Loan Audit identifies any illegalities performed by the lender, their broker, or other parties in conjunction with the loan. During the audit process, a professional should review your loan to ensure that it meets all legal requirements that were in effect at the time the loan was funded.

Why is this important? Loans must be legal to remain enforceable by the lender. Loan violations are serious offenses of Federal Consumer Protection Law and lenders may face huge fines and serious legal consequences for breaking these laws. Financial institutions are typically run by rational business people. Lenders understand the financial ramifications of their mistakes and usually want to avoid expensive litigation or the risk of being charged with large fines. When the audit team commences the negotiating process, the onus begins to shift and the lenders can often be persuaded to mend situations more easily with homeowners.

How does the average home owner benefit? Violations are like bullets being loaded into a gun, used by the audit team to argue your case with the lender. As a rule, the more violations, and the more severe those violations are, the better your chances of obtaining a favorable settlement is going to be. This settlement may include punitive damages, attorney fees, lower monthly payments, a principal reduction, a delay or prevention of a foreclosure sale and more.

What happens if there are violations in my loan? If a loan audit determines that you may have been a victim of deceptive lending practices or any other type of mortgage compliance issue, you may have the leverage necessary to negotiate with your lender. Many borrowers attempt to negotiate with the lender directly. In the early stages of loan modifications, many borrowers who did make deals without proper representation ended up back in the foreclosure process a few months later. Unless you have the time, knowledge and negotiating skills, you should hire an attorney to negotiate on your behalf. Otherwise your lender will either assume you are not serious in your intentions or grant you low priority consideration. Either way you are probably not going to achieve favorable results.

Violations of the Truth In Lending Act carry severe penalties. Most of the recent prosecutions have centered around this document which in recent years was not properly disclosed and/or presented in the loan package. A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan. In the case of a home mortgage, this can be a very significant amount. Costs and attorneys fees may also be awarded to the borrower. This is just one of the many documents the forensic audit team will scrutinize.

Your home and your familys welfare are too important to leave to chance. A forensic loan audit may uncover certain irregularities which in turn will give your legal negotiators the ammunition they need to work out a favorable loan modification program for you. At the end of this process; homeowners who have been the victims of predatory lenders, can rectify a great deal of the damage done to them. Including, resetting the terms of the loan to a lower interest rate, eliminating any back due amounts, restoring their credit history and saving their home.