Loss mitigation encourages lenders though an attorney-based process to help create the best mortgage solution for troubled homeowners. Through this, homeowners can expect one of the following results to occur:
· Loan Modification
· Short Sale
· Deed in Lieu
What is loan modification?
It is renegotiating the terms of your existing loan. It is by far the most desired result in any loss mitigation process. Every client is assigned a personal real estate attorney and a professional loan negotiator, to effect a successful resolution through loan modification.
Results can include:
· Interest rate reduction
· Extended payment terms (up to 50 yrs)
· Principal reduction
You must have at least one of the following criteria:
· High Loan to value (90% or higher)
· Bad credit due to late payments on credit cards, mortgage, medical bills, etc.
· Adjustable Rate (has or will change in the future)
· Option Arm or pick-a-pay loan
· Temporary or permanent financial hardship ( i.e. job loss, divorce, income reduction, medical emergency, etc.)
· High Debt to Net income ratio
· Non-owner Occupied – Ok
The above information was provided to my company by Gary Foydle from The Loan Source. I thought it was good information and consise and hopefully, helpful. Let me know what you would like to hear about in the future.
FYI - If you are currently shopping for a home, rates are up at the moment (around 5.125% for a 30 year fixed). Although there are different lending options, I like to use the 30 year fixed as a sort of "measuring stick" for the lending market. Stay tuned for more updates!