Loss Mitigation Part 1, Lenders Besieged

Before the spring of 2009, there was no ordinary set of guidelines for loan modifications in the United States or in Phoenix, Az. Each lender in Phoenix, AZ had its own rules as to how they wanted to control loan modifications. In most situations, the loss mitigation through loan modification method seriously favored the banks.  Their main worry was to find a way to recover the money that a house owner was behind in payments.  Generally, the lenders would either increase the monthly payment or expand the term of the payments so that those late payments would just be paid off at the conclusion of a loan.  Ordinarily, when the loss mitigation through loan modification procedure called for increased payments, the foreclosure of a property was only delayed by a couple months, because there was no way that they could make a elevated payment.

A new plan, announced in the spring of 2009 by the Obama presidency has altered the loss mitigation through loan modification practice.  The guidelines for loss mitigation through loan modification have changed.  This program mandated that mortgage payments be condensed to just thirty one percent of the home owner’s income.  For many Americans, this meant that they may perhaps once again have the funds for to pay their mortgage payments.  The loss mitigation through loan modification method, appeared to be a huge helping hand. 

Yet, the program only covers mortgages through Fannie Mae, Freddie Mac and the FHA, but it is widely thought that most other banks will desire to follow the rules for loss mitigation through loan modification as laid out by the Obama Presidency.  The Making house Affordable Modification agenda has positioned the focal point right on loss mitigation through loan modification. Countless people in danger of losing their homes to foreclosure didn’t even identify what loan modification was. 

Since the program’s establishment, there have been scores of citizens flooding into lenders to apply for loss mitigation through loan modification.  With all of these people facing the time crunch to evade foreclosure, this has placed the burden of a national housing calamity squarely on the backs of the Loss Mitigation Department at your bank and every bank. 

Before the housing catastrophe and the collapse of the real estate market, foreclosures were not very common.  most lenders and mortgage providers kept a staff of just a couple people to handle loss mitigation.  Foreclosures were not very widespread and loan modifications were even less familiar. 
Nevertheless, the times have surely evolved.  Lenders and lenders have increased the magnitude of their loss mitigation units exponentially. This has meant thousands of people needed to be qualified to work with loan modifications and all of the added tasks that fall to the loss mitigation department at a lending institution.
There are horror stories abound about patrons having to hound and harass Loss Mitigation Departments to get their paperwork pressed through to circumvent foreclosure.  Loss Mitigation Departments are currently still undermanned, under experienced, and overworked.
Read Part 2 of our Loss Mitigation Report to Locate a Better Solution to avoiding foreclosure.

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Fred Weaver and Kevin Kauffman, Group 46:10, do daily blog – find it here: Fountain Hills – Avoid Foreclosure Arizona