Mortgage Mitigation Do’s & Don’ts

One of the biggest mis­takes you can make in loan mit­i­ga­tion is ignor­ing the rules. Although your law firm does the nego­ti­at­ing, it helps a great deal if you do your home­work and arm your­self with the right infor­ma­tion.  After all, you are deal­ing with lenders and you still have to play by their rules. Here’s a list of loan mit­i­ga­tion “do’s and don’ts” to help you avoid com­mon pitfalls.

Know your rights:

More than 80% of mort­gage con­tracts vio­late one or more lend­ing laws and most of them go unno­ticed.  These vio­la­tions can be your biggest weapon in the loan mit­i­ga­tion process.  They can give you the lever­age you need to nego­ti­ate with your lender and stop fore­clo­sure.  Your loan mit­i­ga­tion attor­ney can help you under­stand your rights and use them to get the results you want.

Don’t wait too long:

The fore­clo­sure process is designed so that you have time to get back on your feet and save your home.  But that doesn’t mean it’s safe to pro­cras­ti­nate.  The longer you wait, the harder it becomes to assist you in resolv­ing your mortgage.  With each day that passes, a del­i­quency becomes more costly to a lender and their will­ing­ness to stop the fore­clo­sure process and enter into a mod­i­fi­ca­tion dimin­ishes.  The moment you decide you need assis­tance with your mort­gage, call a loan mit­i­ga­tion attor­ney and get the process started.

Work with your attorney:

Your loan mit­i­ga­tion does not rest in the hands of your lender, your bro­ker, or your loan mod­i­fi­ca­tion attor­ney.  These peo­ple can all help, but you have to do your part and coop­er­ate with your lawyer.  Make sure to sub­mit your paper­work on time, answer ques­tions hon­estly, and give your attor­ney a clear pic­ture of your finan­cial sit­u­a­tion.  These days, cer­tain mod­i­fi­ca­tion pro­grams have strict timeta­bles for the sub­mis­sion of doc­u­ments and miss­ing a dead­line can dis­qual­ify you from that program.

Bank­ruptcy?:

Many peo­ple think that fil­ing for bank­ruptcy can help them stop a fore­clo­sure.  Data from the Amer­i­can Bar Asso­ci­a­tion shows that it doesn’t work that way.  In fact, 96% of the peo­ple who file bank­ruptcy end up los­ing their homes any­way.  Then they are left with a fore­clo­sure AND a bank­ruptcy on their records.  In some cases, bank­ruptcy is still a viable option, but don’t make any deci­sions with­out get­ting legal advice.  most rep­utable attor­neys will per­form their ini­tial con­su­la­tion for free.

Have a backup plan:

Not all peo­ple will qual­ify for a loan mod­i­fi­ca­tion.  Maybe you’ve fallen too far behind, your lender may sim­ply be dif­fi­cult to work with, or maybe you don’t need it after all.  In any case, it is always wise to have a backup plan.  Your mort­gage mit­i­ga­tion attor­ney can help you find the best solu­tion.  If you can’t get your loan mod­i­fied, talk to your lawyer about a short sale or a deed in lieu of fore­clo­sure solu­tion.  A short sale involves sell­ing your home for less than its fair mar­ket value and giv­ing the pro­ceeds to your lender.  This solu­tion con­trols the dam­age to your credit by pre­vent­ing a fore­clo­sure, thereby mak­ing it eas­ier for you to get back on your feet.  You may also be able to pre­vent a “defi­ciency judg­ment” against you that some­times results from a foreclosure.

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