What does a loss mitigation application mean?

What does a loss mitigation application mean?

A loss mitigation application is a form that details your income, expenses, people in your household, and financial hardship. Federal law requires mortgage servicers to work with you during the application process or put you in contact with a loss mitigation specialist who represents the servicer.

Should I do a loss mitigation?

Loss mitigation can work, but not always Loss mitigation can be a great option for those who want to avoid foreclosure, but it won’t always be a viable solution for every person. The goal of loss mitigation is to get the borrower paying again or recoup the money owed to the lender through the sale of the home.

Is loss mitigation the same as loan modification?

If you’re struggling to pay your mortgage, you might be able to lower your payments with a loan modification. “Loss mitigation” is the process in the mortgage-servicing business where borrowers and their servicer, on behalf of the loan owner or “investor,” work together to prevent a foreclosure.

What is a loss mitigation fee?

The term “loss mitigation” refers to a loan servicer’s duty to mitigate or lessen the loss to the investor (the loan owner) resulting from a borrower’s default. Given the costs that an investor must bear through the foreclosure process, loss mitigation is intended to be beneficial for the investor.

What is FHA loss mitigation?

Loss Mitigation. Prescribed set of default workout options that allow lenders to effectively work with delinquent FHA borrowers to find solutions to avoid foreclosure.

What does mitigation mean in real estate?

Mitigation is defined in Section 15370 of the California Code of Regulations (CEQA Guidelines) as: (a) Avoiding the impact altogether by not taking a certain action or parts of an action.

What is the purpose of underwriting in loss mitigation?

Loss Mitigation Underwriting (LMU) — the process of providing insurance coverage for existing litigation or for litigation that is imminent.

What is hardship in loss mitigation?

A hardship is a circumstance that is beyond your control that has resulted in a situation where you can no longer afford to make your current mortgage payments. Hardships that quality for loss mitigation (foreclosure avoidance options) include: job loss or a reduction in pay.