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Welcome to the National Mortgage Network’s
Loan Modification page

I urge you to read this foreword below:

In the current state of mortgage and lending affairs I am sure you have heard the following terms; Loss Mitigation and Loan Modification. What is happening now since FHA, Fannie/Freddie and the Loan Limit Increase Bill, along with numerous other government and non governmental agencies have failed to come up with a solution to close the wound of the bleeding American Home Owner, the private sector is creating companies that can help. Attorneys and specialist advisors are jumping in to deal with financial institutions directly, on behalf of the troubled American Home Owner, for a fee. As a public service, we are doing research to help you understand what this new breed of company really is so you can make an informed decision as to whether or not to use this service.

To continue a diligent approach, we at the National Mortgage Network were initially skeptical of the idea of any Homeowner paying another entity or company to negotiate with your current lender or lenders, considering You can do it yourself!  We have found that this can be extremely difficult and the terms so commonly offered by the lenders are in many cases unacceptable to the borrower and do not help them stay in their homes.

This was what the whole “Hope Now” platform was based on with the whole “Rate Freeze” concept but the terms would usually follow the original note rate and original payments or would be based on a higher market rate if modified. If a client is in dire straits financially, then how will this help them stay in their home if the original terms or something even closely resembling them were just not currently acceptable? Secondly it has come to our attention that roughly 83% of people who try to Loss Mitigate themselves are unsuccessful due to the fact that they either do not finish the often excessive amounts of paperwork and stay on top of the process or they just do not end up negotiating advantageously enough with their lenders. So this brings us to the idea of would you represent yourself in a lawsuit or would you hire a competent attorney to help you?

The National Mortgage Network researched 11 Companies and Individuals that advertised Loss Mitigation and loan Modification services. We have decided at this time to only endorse or recommended two companies that work together (see the link below) to provide Loss Mitigation services . The price points we verified were extremely fair and reasonable for these types of services and we were also impressed with the success stories we reviewed. The decision was really just based on the discounted amount that this company in reference chooses to charge clients and their success rate they provided to us.

The other interesting fact was we found two types of companies. Many are made up of groups of ex-loan officers that are changing their career paths and trying to not only help the client with their upfront case paperwork but also actually try to negotiate themselves with the banks, with little or no experience doing so. The other groups we found were made up of attorneys or people with certifiable experience but we found them unwilling to give us the information we felt we needed in order to feel comfortable with initial payment for their services. Frankly we felt with both types of companies that the amount they charged to perform the transactions was also pretty expensive overall. We also tried some nonprofit agencies we found listed but never received a return phone call when we inquired about help.

We will continue to monitor as much information as possible that comes out about these types of services.

We want Homeowners to be extremely aware of the fact that we found some stories on the web that there is evidence of fraud and some companies are charging expensive upfront fees and not performing the services promised.

This was our initial fear and I wouldn’t be surprised if you hear about some of these companies and individuals getting investigated by the Local, State and Federal Governments.

Loss Mitigation and Loan Modification:

What is it? Let’s start with looking at the definition of the words MITIGATION and MITIGATOR.

mit·i·gate     Pronunciation verb, -gat·ed, -gat·ing.
–verb (used with object)

Related forms
mit·i·ga·ble   Pronunciation Key - Show IPA Pronunciation, adjective
mit·i·gat·ed·ly, adverb
mit·i·ga·tion, noun
mit·i·ga·tor, noun

Here is the definition that we concluded as LOSS MITIGATION from many of the mortgage related web sites and platform:

Loss mitigation --a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan.

Mortgage Loss Mitigation: The trustor or mortgage holder needs to repay a delinquent portion of a loan as a result of impending default, foreclosure, bankruptcy, REO, and so on. Before a foreclosure or bankruptcy occurs after a one or two months default, a repayment plan may be proposed to the delinquent mortgage holder by a loss mitigation specialist to satisfy the amount owed to a bank or lender. Loss mitigation may prevent foreclosure or bankruptcy. (See the rest of this article under “Loss Mitigation Defined”).

The loss mitigation specialist can be a real estate agent or broker, bank officer, attorney, paralegal, or anyone that has been trained and has experience with a loss mitigation business opportunity. Loss mitigation specialists should be investigated by the consumer regarding prerequisite experience, knowledge of repayment plans, and experience in dealing with banks and lenders. Knowledge of real estate financing and laws, good communication skills, and so on, is essential in being effective.

Bottom line is it can be anyone who chooses to take the title. This is why we urge you to make sure you are careful with who you deal with (see our editors foreword above) when solicited for these services. There are no licensing requirements thru the state of California unless you are actually currently in the foreclosure process. If this is the case then they are required to be HUD Certified for Foreclosure counseling (see HUD links below).

Important HUD Links:
http://www.hud.gov/foreclosure/index.cfm
http://www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm

Types of Loss Mitigation Options ~

• Forbearance – Typically considered when a temporary loss or reduction of income has been experienced.  The Borrower will be granted a small period of time to reduce the amount of their payments, but will “make that amount up” (plus interest) in subsequent payments.  Note: When the loan in question is an FHA loan, this option is referred to as a Special Forbearance.
• Deed-In-Lieu of Foreclosure – This option allows the Bank to accept title to the subject property without going through the process and expense of a foreclosure.  The Borrower is enabled to “walk away” from the home without a foreclosure on their credit report.
• Loan Modification – The Bank agrees to modify the terms of the existing loan (payment, interest rate, principal balance, term, or a combination of these items). 
• Short Sale – on many occasions the borrower “wants out” of their home, but owes more on their mortgage(s) than the current market value of the home.  When this option is presented, the Bank will allow the borrower to sell their home at the current market value (even though the sales price is less than the amount of the current mortgage) and “forgive” the difference.  This causes the Bank to “come up short” on their payoff…thus the name Short Sale.
• Short Refinance – This concept is the same as a Short Sale, but the Bank agrees to “forgive” the difference in the form of a refinance.  This option is extremely rare currently, but it is important for you to know that it exists (and may soon gain popularity amongst the Banks).
• Repayment Plan – This option is similar to a Loan Modification & Forbearance in that the Bank will work within the borrower’s budget to formulate a Repayment Plan.
• No Offer At All – As mentioned previously, the Loss Mitigation Staff at the Bank might decide to enforce the contract that the Client had previously agreed to (most commonly when a borrower can already reasonably afford their payments).

We will continue to bring more news and information about these services and what to expect in the future. Below is all of the related library and information posts we feel are of great benefit to read and understand. Call today to speak to one of our counselors on the help line at 1-800-349-2119 for any questions and remember KNOWLEDGE IS POWER!

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