Foreclosure and the Loss Mitigation Process

Chicago Foreclosure Help

Loss Mitigation refers to options property owners exercise when faced with a challenging mortgage situation.

What can we do for you?

The first thing we do is complete an assessment of your financial situation, all the documents involved and the process by which you engaged in your original mortgage agreement or loans.   Next, we explore all of your possible remedies.

Here is a brief listing of the steps we can do:

Loan Modification:

This allows you to adjust the terms of your original mortgage – meaning, coming to an agreement with the Lender to reduce the interest rate (and your monthly payment) or lengthening the date of amortization so you have more time to pay off the loan…or both.

Foreclosure Defense & Offense:

An often overlooked option.  These Affirmative Defenses and Counterclaims come about after a review of the documents and the narrative between the borrower and the lender.  If the lender has violated any laws in the process, you can go on the offensive against a foreclosure suit.

Repayment Plan:

We arrange with the Lender a plan to continue to pay the mortgage and catch up on any back payments.

Short Sale:

If you are unable make payments it is possible that the Lender may agree to a short payoff, or accept an amount less than the full amount of the original loan.  We can help you negotiate such a transaction and make certain the documents involved severe all of your future liability.

Deed In Lieu Of Foreclosure:

If your house has been on the market for at least 90 days at fair market value, we can explore if you are eligible for a Deed In Lieu Of Foreclosure, in which case the lender waives all deficiency judgment rights.

Reinstatement of Loan:

Provided by the Illinois Mortgage Foreclosure Act and permits the home owner to cure the default by making a lump sum payment.  This bundles mortgage arrearages, past payments, penalties, cost of collection (and foreclosure) and any court approved legal fees.  The reinstate rights are held by the parties on the mortgage.  It is valid for 90 days after the date a Foreclosure Complaint is served on the Borrower.

Special Forbearance:

(Type I & II FHA loans) If the loan is 90 to 365 days overdue, a Special Forbearance provides greater relief than a regular repayment plan.

Partial Claim:

(FHA Mortgages and certain Freddie Mac Investor Loans) Essentially, a 2nd Mortgage with the Secretary of HUD. This “Partial Claim Note” begins at the maturity date of the First Mortgage, carries no interest and incorporates your past due payments. Only loans that are 120 to 365 days past due are eligible.

VA Loan Modification/Refunding:

This is when the Veterans Administration buys the loan from the Lender. Then, the VA considers options to help you save your home.

Bankruptcy:

This is obviously a last resort but we take all of your financial options into consideration.  In some instances, it is more productive to get a fresh start.  We can discuss how bankruptcy affects your ability to help us save your home.

Note that, this is merely a summary of the options when facing foreclosure.  Everyone has unique circumstances.  Also, the financial institutions involved impact what we can accomplish.  But, you don’t know what you can achieve until you work with a qualified attorney.

Give me a call.  Chances are, I can help.

Kurt G. Larsen