Short Sales and Loan Work Outs Nothing New Just More Popular In A Default Driven Market

The aspect of loss mitigation, short sales and loan work out is booming in popularity across the nation. As mortgage lenders look at the prospect of foreclosures doubling over the next 3 ears and remaining high for at least five years is the industry learning to be more helpful? The process of loss mitigation begins as a home owner becomes delinquent on their mortgage either by missing consecutive payments or paying habitually late or skipping months. First let me tell you that real estate agents and homeowners need to check with their home state's regulatory or consumer agencies to see if this process is an option before beginning the process. Mortgage banks and investors all want the home owner to make the payments, that's where they make their money on the investment, banks rarely if ever show any profit in a foreclosure. Recently mortgage banks have been trying to work with homeowners to keep them in the house and keep them making payments, on a timely manner. The most popular solutions are forbearance and loan modification. They both require the home owner to show why they have fallen behind and the ability to start making payment in the future so as to prevent the late payments from re-occurring. If you are a homeowner in trouble, contact your mortgage company at once, do not wait for the collection calls, get out in front, ask for help, demand help if necessary ask of the lender's loss mitigation department, but never tell yourself the problem will just work out somehow or someday; it will....that solution is called foreclosure and it is financially and mentally devastating.
In my experience working with home owners over the past 3 years I have found that there are several banks that will go above and beyond, while some of the major lenders are still working as usual & ignoring a simple solution to what is sometimes a short term problem. Home owners need to be prepared to provide lots of documentation in a clear and concise manner to show the cause & effect and the plan of action to resolve the matter. Paycheck stubs, checking account statements, proof of unemployment, disability or illness along with a budget and a written action plan are all required to begin the process. The end result however can be well worth the efforts put forward now.