Do I Need to Hire a Loss Mitigation Lawyer?

Do I Need to Hire a Loss Mitigation Lawyer?

If you’re receiving letters threatening foreclosure on your home, it’s time to act fast. You need to seek out the alternatives to foreclosure to avoid losing your property once and for all. Thankfully, you can get the help you need by hiring a loss mitigation lawyer. With their help, you can explore all the different options available to you, choose the best one for your needs, and move through the application process with ease.

What Is a Loss Mitigation Lawyer?

A loss mitigation lawyer helps their clients choose the best foreclosure alternatives and move through the steps required to keep their homes. They act in the best interest of the borrower to balance the loan servicer’s representation of the investor.

Loss mitigation lawyers will often negotiate with the lenders on their client’s behalf to hash out the terms of the agreement. They can help get a better interest rate or extend the loan term, for example, helping their clients gain steady footing while facing financial difficulties.

On top of that, they’re able to help their clients understand their legal rights and avoid predatory lending practices. They’ll double-check all paperwork before their client signs it, for example, to check for problematic terms and explain all the info in each document.

Loss Mitigation Options Handled by Attorneys

Options a loss mitigation lawyer can help with include:

  • Forbearance: Decreases or suspends loan payments to let you get caught up
  • Loan Modification: Reduces the monthly mortgage payment by putting the balance owed on the debt balance
  • Repayment Plan: Wraps total amount due into future payments to bring the account current

If you’re okay with losing the property, but want to attempt to salvage your credit history, then you can get help with a deed in lieu of foreclosure or a short sale instead. Although both options involve giving up the property, they’re often better than losing the house to foreclosure.

Reasons to Hire a Lawyer for Foreclosure

Although it’s obvious that you should hire a loss mitigation attorney when fighting foreclosure in court, that’s not the only reason to have a lawyer on your side. Foreclosures are oft-complex, full of pitfalls, and generally frustrating to navigate.

So, it just makes sense to have someone on your side who can explain what’s happening and help you figure out how to move through each step. A loss mitigation lawyer fills that role quite easily by using their skills and experience to keep you well-informed and ready to take action.

Other ways you can benefit from hiring an attorney include:

  • Have an experienced set of eyes review every document
  • Receive personalized advice on how to fill out the paperwork
  • Get help in figuring out what supporting documentation to provide
  • Review all the loan servicers actions to confirm they’re acting in good faith
  • Avoid violating federal or state laws that could result in property loss
  • Move through the appeal process if the initial application is denied

Above all, it’s always a wise choice to bring in an expert who can help you properly present your case and move through the steps with ease. You’ll find your stress levels decrease as a result, especially as you banish worries about making the wrong move.

What to Expect During the Loss Mitigation Process

As soon as you know financial difficulties will get in the way of making your mortgage payments on time and in full, it’s time to start thinking about loss mitigation. Waiting for the foreclosure notices to arrive only complicates the process further as the total debt owed increases.

To start the loss mitigation process, you’ll want to contact an experienced attorney to discuss your case. After deciding which option to pursue, they can help you fill out the loss mitigation application and send it in for your loan servicer’s review.

Once it’s sent in, the loan servicer has five days to send confirmation and let you know if the application is complete. If it’s deemed incomplete, you’ll need to amend the application by the given date. From there, your lawyer will help you respond to all correspondence and negotiate on your behalf as needed.

Upon receiving an approval letter, you’ll just need to sign the paperwork after your lawyer reviews the documents. If you get a denial letter instead, your loss mitigation lawyer can help you appeal the decision instead.

After getting approved for the loss mitigation plan, you’ll need to abide by all terms of the agreement with help from a loss mitigation lawyer. Otherwise, you could end up back at square one as foreclosure letters land in your mailbox.