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Dec 1, 2008 
Loss mitigation is when an asset isn’t worth what was expected and then deciding how much loss is acceptable. If you have shares of stock or another investment that isn’t worth your original purchase price, then you have to decide how badly you want to keep it and what price you’d accept when selling. This is how banks have to look at every loan that doesn’t perform. They must decide to keep the terms, possibly foreclose, and lose the payments from it…or to forgive debt or make other concessions so that the loan works for the homeowner.
When negotiating with the lender or loan servicer, there are different tactics that are available:
- Loan modification – address the terms and conditions of the loan itself
- Lien modification – the lender modifies the current loan so that the borrower can qualify to refinance into a new loan
- Short sale – the lender agrees to the house being sold at a price lower than the mortgage amount
Each of these solutions has different advantages depending on the homeowner’s situation and goals. Working as an arbitrator with the borrower and lender’s interests in mind, Loan Modification Masters works with a proven Law Firm that negotiates to find the best solution for each individual case.
