Banks are, more than ever before, facing huge, sometimes devastating losses from loans they have made that are in default. Foreclosure rates are high all around the country, and it appears that it will continue to get worse for awhile. because of this, many banks are trying to look at options other than just foreclosing and then trying to resell the property.

    Enter the Loss Mitigation Consultants, or LMCs. An LMC is a person, usually a licensed real estate agent, who is hired andtrained by a company to try to assist the banks to not have to foreclose. When an LMC is given an assignment, they need to visit the propertyand try to contact the borrower to see what can be done, other than going through the foreclosure process. In some cases, banks will modify the terms of the mortgage so the owner is "caught-up" and they can resume regular payments (this is especially good when circumstances, such as being out of work due to illness or injury, caused a financial hardship that is only temporary). Sometimes banks will lower interest rates or offer fixed rates if the problem was adjusting rates that raised the payment too high for theborrower to make. Sometimes, if the borrower can't or won't agree to a work-out, the bank will allow some extra time for the borrower to get the property listed and try to get it sold, rather than foreclosed. Other times a borrower may agree to give the deed-in-lieu of foreclosure and voluntarily move out.

    The LMCs job is NOT to decide which option is the best in any particular situation. Their job is just to meet with the borrowers, try to get specific financial information and an idea of what the borrower s can and want to do, and pass that information on to the bank. An LMC may need to perform a BPO and have access to the property for that purpose, so the bank will have a better idea of what is in their best interests. The ultimate goal is to try to keep from having to foreclose, and most banks using LMCs will try to work with the borrowers however they can.

    The biggest obstacle to a bank being able to stop the foreclosure process is usually a lack of communication with the borrower. Often, by the time an LMC would be involved, the borrowers are frustrated and don't realize that they have options. They have probably received many letters and phone calls from their mortgage company, and maybe other creditors, as well. They often don't call back or respond because they are afraid of what they will be told. The most important thing to remember is, if there are finacial difficulties involved, ask the bank what can be worked out. If you can document your hardship, verify income, show that you are interested in trying to work something out, that can help your situation. And, if you are contacted by a Loss Mitigation Consultant, remember that means the bank is not wanting to foreclose, they are wanting to explore all the options. Also remember that the LMC is not wanting to see your home foreclosed, so don't take out your aggravation on them. They are just doing a job, and often it's because they really want to help people. Let them try. You might just be surprised to know that you have options...