|
Loss mitigation leads are the most powerful tools in helping homeowners save their homes from their most dreaded enemy, foreclosure. Sufficient understanding of the basics however is recommended to exploit the maximum potentials of these leads.
Several millions of homes now hang in the balance between being kept by the homeowners of being taken to foreclosure sales, the homeowners' worst nightmare. To make matters worse, the global financial crisis that has incapacitated the economies of the world has made the already hard task of making mortgage payments on time even harder. The unfortunate homeowners now at the brink of losing their homes have far exceeded the seven million expected counts. The ravaging claws of foreclosure have greatly devastated the homeowners, the communities, the lenders, the industry, and the economy impaling it almost to paralysis.
Homeowners not yet victims of the foreclosure catastrophe should learn from the misfortune of their fellow homeowners so as not to add any further to home death toll. Most of those who are now in fear of losing their homes were those who fell victim to predatory lending or careless investor guidelines. While others, more likely the new ones were those who suffered hardships like unemployment, injury, death of a family member, poor budgeting, and the menace of the global financial crisis. To further sink them to the depths of foreclosure are those people who intentionally or unintentionally coached them to do the wrong decision, walking away and doing nothing believing in the promise of a short sale, lease-option, or the chance to be back in the market in a matter of days. And some homeowners simply do not really understand or know barely of the long term ramifications, side effects and rebound effects that such actions will bring to the homeowner, the community, the industry, and the whole of the economy.
In the past homeowners had more options like that of refinancing or trying to sell their homes and then use the profits to pay their debts. But the downsizing of the economy has brought forth stricter lending guidelines and the continuously declining market values brought about by huge levels of inflation has eliminated most of the opportunities a homeowner could take. Thus homeowners in the crisis of rising obligations and falling home value are forced to take other, frequently more drastic options. Today owners are being solicited in exchange for aid in making a short and quick sale prior to the home being taken into a foreclosure auction. Unfortunately, such feat is very risky as many providers are not reputable and seek only to steal any remaining equity and displace the owner of his home. Therefore those who do not take the necessary precautions are very prone prey to these merciless predators. But partnering with legitimate loss mitigation and loan modification providers may very well be the best option one can take in saving his home.
Other homeowners simply blindfold themselves and neglect the fact they are in grave danger of losing their homes. They do nothing until it is too late to obtain a favorable solution as a result of conflicting information. Time is a necessity in loss mitigation and loan modification programs and it is always best to seek help as soon as the homeowners comes aware that foreclosure is closing in on his home.
Both foreclosure and short sales have negative impacts on all involved parties, the homeowner loses his home and the lender loses liquid assets and faces high maintenance costs of keeping a home with a declining market value that may never be sold. To better improve the economy homeowners, lenders, and loss mitigation and loan modification companies should have better understanding of all the available options along with all the possible consequences.
1. REFINANCE
Pro: Owner Maintains Home
Con: 80% do not qualify and new payments are higher than original payments
Comment: Usually a temporary solution that may cause a larger long-term challenge
2. SALE
Pro: Preserves credit and possibility of accessing existing equity
Con: Lack of equity/timing limit opportunities and owner is displaced from home
Comment: Dependent on existing equity and marketability of the home.
3. BANKRUPTCY
Pro: Extends the foreclosure proceeding for a period of time
Con: Costly stall tactic that tarnishes credit/leads to foreclosure 60% of the time
Comment: Misconception is mortgage is protected by bankruptcy - only arrearage.
4. SHORT-SALE
Pro: Preserves credit (through 12/31/08 with current Stimulus Package provisions)
Con: Lack of timing/access to lender limits opportunity/owner is displaced from home
Comment:
Dependent on existing equity, marketability and lender accepting short payoff
5. DEED in LIEU of FORECLOSURE
Pro: Lender may waive deficiency judgment rights
Con: Owner is displaced from home/credit is damaged/possible tax ramifications
Comment: A voluntary foreclosure with no real benefit - a step above foreclosure
6. FORECLOSURE
Pro: None
Con: Owner is displaced from home and credit is severely damaged
Comment: Worst of all possible outcomes for homeowner
7. LOSS MITIGATION
Pro: Multiple solutions to keep owner in home
Con: Difficult for homeowner to negotiate with Lender
Comment: The best solution if owner wants to retain the home
A. LOAN MODIFICATION
Possibility of lower fixed rate payment and reduction in principle.
B. REINSTATEMENT
Repayment plan that enable arrearage to be made up over time.
C. FORBEARANCE
Temporary suspension/reduction of payments prior to a repayment plan or modification.
D. PARTIAL CLAIM
No cost/rate/payment 2nd mortgage - paid after 1st mortgage is completed
Preventing a foreclosure or a pre-auction short-sale has a positive effect on the homeowner, the local community, the lender and the economy as a whole. (Short sales are obviously the best solution when a modification cannot be reached or the owner does not wish to retain the home).
While Realtors and Loan Officers may miss out on traditional transactions (sale/mortgage) they can participate in a revenue opportunity with a Foreclosure Prevention Loss Mitigation Company.
Be part of the solution and not part of the problem...
Help stem the tide of foreclosures, preserve local property values and supplement your income with loss mitigation. Many professionals have already explored this opportunity by referring prospects they cannot service. It can be a win-win-win situation for all parties and has certainly caused a number of broker/owners to rethink their current business plans.
For more information about loss mitigation and loan modification or for buying the best telemarketed loss mitigation leads the industry has to offer please check out CallComLeads.
| 
Disclaimer
