Loss Mitigation is the solution to the Foreclosure Epidemic that we are experiencing today! It is considered ground zero for the distressed home owner and is the first step in stabilizing the economy.
With over 205,000 new foreclosures every month, lenders are experiencing catastrophic losses that have shaken the global economy! The average foreclosure will cost lenders in excess of $50,000 dollars. Every dollar lost by lenders through foreclosure, in turn, represents a major personal loss by the homeowner that looses their home to foreclosure. Neighbors that surround foreclosed properties suffer with declining property values .
With this as a backdrop, Loss Mitigation has exploded as an option for today’s homeowner! What is Loss Mitigation? In short, it is a negotiation process whereby new mortgage terms are negotiated on behalf of the homeowner with their current lender, in order to prevent possible foreclosure.
The process of transacting a Loss Mitigation case is simple. It begins when one of our Loan Modification Specialists identifies a homeowner with one or more qualifying hardships. The Specialist will collect the required client’s authorization along with the servicing fee and immediately forward it to the assigned Negotiator.
Generally, the new mortgage terms that we secure will typically consist of modifications such as lowering the interest rate, changing adjustable rates into fixed rates, reducing the principal balances and extending the loan terms & forgiveness of payment defaults. There are a minimal number of cases where it may not be practical to proceed with a Loan Modification process. In these cases, our Negotiator will assist with Short Sale Negotiation, Deed in Lieu of Foreclosure, or the Cash-for-Keys Negotiation process.
The purpose of modifying the mortgage terms is to create a long-term ability for the homeowner to make their mortgage payments. Successful loan modifications in some markets average 20 to 40% reduction in monthly mortgage payments.
It’s important to note that Loss Mitigation will be a significant sector of the current and future mortgage market and is expected to last through 2013. The last wave of ‘hybrid option arms does not begin resetting until the year 2012. Stated another way, the ‘Loss Mitigation Era’ is expected to last just as long as the ‘Refi Boom’ lasted.
A word of advice to Mortgage Professionals: If you were late taking advantage of the “Refi Boom”, you do not want to make the same mistake twice. The Loan Modification Era is here! Are you going to take advantage of it?...................
65% or more of all current refinance inquiries will not appraised for a loan and will be strong candidates for the Loss Mitigation process. Therefore, by adding Loss Mitigation to your product offerings, an astute Mortgage/ Real Estate Professional can add a New Revenue Stream born entirely of up side down homeowners and Non-Qualified Borrowers.
Another factor worthy of serious consideration is that the number of Loan Modification Specialists providing Loss Mitigation services is grossly disproportionate to the number of homeowners requiring the help afforded by Loss Mitigation.
There are many forces that have come together to create the Perfect Storm for Loss Mitigation. It is an opportunity you must seize now!
If you would like to add Loss Mitigation to your portfolio of product offerings you can call us on 404-456-3580 or email Steven at stevenb@ushousingassist.com.
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