How to Negotiate Foreclosures and Short Sales

Bank Loss Mitigators: How to Negotiate Foreclosures and Short Sales by Simon Volkov

Bank loss mitigators work with homeowners who are trying to save their home from foreclosure. In essence, the loss mitigator is the middleman between the bank and homeowner. Their job is to devise a plan to keep homes out of foreclosure that is agreed upon between the homeowner and lending bank. The bank loss mitigator cannot approve or deny a plan. Instead, they use gathered information to suggest a plan to the bank that would be in the best interest of both parties.

Bank loss mitigators use information supplied to them by both the homeowner and bank to determine the right course of action. The information collected can include mortgage payment amount, delinquent payment amount, proof of income, list of the homeowners expenses and debts, foreclosure hardship letter, and tax returns.

A foreclosure hardship letter is written by the homeowner to explain the circumstances which caused them to become delinquent on mortgage payments. The hardship letter should also include if these circumstances are ongoing or if they were temporary. The bank loss mitigator uses the letter as a reference to devise a plan for the homeowner. The information in the hardship letter should be factual and detailed.

When homeowners are able to become current on their past due mortgage in a reasonable period of time, bank loss mitigators can devise a loan modification. This type of plan allows borrower's to make payments on the past due amount in addition to their regular monthly payments.

For example, a homeowner is three months behind with a monthly payment of $700. The bank loss mitigator establishes a plan that over the next 10 months, the homeowner would pay their regular monthly payment and an additional $210 to payoff the past due amount. As long as the borrower makes timely payments, a loan modification can stop foreclosure proceedings.

Bank loss mitigators can assist in negotiating a short sale of the real estate if homeowners are financially unable to continue payments on the home. A short sale is when the lending bank agrees to accept an offer lower than the amount owed. For example, if a mortgage balance is $200,000 the bank might agree to accept $190,000 for the home. A short sale approval can help the homeowner salvage their credit and the lending bank cut their loss.

It is important to remember bank loss mitigators do not make final decisions. They review provided information and devise a plan that will be beneficial to both the homeowner and lending bank. A short sale or repayment plan must receive final approval from the bank.

Private real estate investors can help individuals facing foreclosure. Borrower's can sell their home to investors once they obtain short sale approval from their lender. Short sales can be less detrimental to the homeowner's credit score and minimize losses for the bank.

About the Author

Simon Volkov, private investor, helps individuals with short sales, foreclosures and working with bank loss mitigators. Learn more about services offered by visiting www.SimonVolkov.com.