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T & A is essential for successful loss mitigation

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Services for Real Estate Pros with lulugraphix-creative photography & fine art

T & A = Timing and Attitude is one of the essential formulas for successful loss mitigation.

Timing—Reaching your client as early as possible in their challenge to pay their mortgage and learning the reasons why they can't make their payments is paramount. Do they anticipate problems due to job loss, illness or other changes in their professional or personal circumstances or have they been underwater for several months or somewhere in between? These questions and more are required to determine which path is best.

It's easy for some people to see their problems coming before they hit critical mass. Therefore, it's easier for them to seek and receive help before the mortgage company hits them with late payment fees, etc. Working with these folks makes the process fairly smooth and a positive outcome can usually be guaranteed. However, if a person waits until they are one payment late or even longer the rate of success is radically reduced. The result of foreclosure or the loss of a short sale increases dramatically the longer a person delays in seeking a workable solution.

Attitude—Clients also need to understand that their attitude can make or break a positive outcome. They need to cooperate and be honest about their current mortgage situation. If they lie about how far behind they are with their payments, their income, credit card debt, employment issues, etc. they have not only wasted your time, but theirs as well. The clock keeps ticking while you try to figure out fact from fiction.

It's understandable that people are embarrassed about not being able to pay their bills, but it's more embarrassing to lose your home because you wasted valuable time by hiding the facts or thinking no one will notice bad credit history, job loss or other problematic information.

So it is essential to convey to your clients that the earlier you begin to seek a workable solution and the more positive their attitude the more likely they will receive positive results. The goal after all is to avoid foreclosure or to close a successful short sale.

Here's a true example of poor timing and unrealistic attitude I've personally encountered as a certified loss mitigation consultant...

Not long ago a man called in a panic, sounding just like the Mad Hatter in Alice in Wonderland, saying,"what am I gonna do, what am I gonna do...?" He really didn't want to answer many questions... he kept saying he had been able to keep from losing his house for over a year by telling his mortgage company one thing or another, but they weren't buying his story any longer because he had failed to perform too many times. Yet he was convinced he could come up with another scheme. I tried to obtain info concerning his spouse... did she work outside the home? No, she was a homemaker. Is she willing to get a job? No, she doesn't know about their financial problems! Would he consider working an extra job? No, he couldn't do that because she would begin to ask questions. You get the picture. The man was in absolute denial and would not accept the reality of his situation. There wasn't anything I could do for him. I'm not sure why he even called me. I felt badly for his family.

We can't help all of the people all of the time but it is rewarding when we can help some of the people some of the time.

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Comments(9)

Timothy Butterworth
Taking a break - Portland, OR

Thank you for this information and heads up.

I am in the middle of one right now soon to be three. In 4 years I never did one , nor did i want to and now they are coming from all sides.

Nov 03, 2008 05:39 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Sometimes in the beginning, all you can do is listen....appreciate and understand the confusion and stress that financial situations bring to the life of someone who may be facing foreclosure...let them talk...when they quiet down...explain the alternatives....when they are calmer, they will listen.

Nov 03, 2008 10:39 PM
Linda Bourgault
lulugraphix-creative photography & fine art - Flower Mound, TX

Tim, This is the nature of our market right now. Being willing to see the changes in the market and adapting to them will allow you to continue to be more productive. When you are able to help a family avoid financial disaster they are very grateful. It may take them awhile to recover, but when they are ready to purchase another home they will remember you!

Nov 03, 2008 11:04 PM
Linda Bourgault
lulugraphix-creative photography & fine art - Flower Mound, TX

Sally & David, You are right... listening is a major component to allow clients to share their story with you in their own way and in their own time. It is one of the most emotional volatile situations a person can experience. Compassion is needed to help people in these situations. I know what it's like first hand because it's happened to me and this has helped me serve my clients better.

Nov 03, 2008 11:11 PM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Great thoughts Linda. With some time to prepare prior to disaster striking you can settle into some plans without your mind all in a panic. The good attitude despite the stressful circumstances I agree goes a long way toward making everything turn out for the best.

Nov 04, 2008 12:16 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Linda - Waiting can be financially deadly.  Part of our job is to reach out to as many folks as possible.  It's also on them to not be afraid to reach out to us as soon as fear trouble may be near.  Good post, Linda.

Nov 04, 2008 05:35 AM
Linda Bourgault
lulugraphix-creative photography & fine art - Flower Mound, TX

Gary—Yes, it's better to prepare/plan than wait for disaster to strike. It's heartbreaking listening to so many sad stories, but many could have been averted if they would have realized their problems earlier. When I first started in loss mitigation it was difficult for me to believe so many people weren't aware of the kind of trouble they were courting, but I learned that some people really were clueless. They just didn't understand the ramifications, where to seek help or were so embarrassed they felt powerless. Thanks for your comment.

 

Jason—Waiting is definitely a road block that's difficult to overcome when working a short sale. However, sometimes a home owner sees the problem before it manifests and seeks assistance only for the mortgage company(s) to be uncooperative which really slows things down and heightens the stress level. On occasion this can't be helped because the mortgage companies are overwhelmed by the sheer volume of loss mitigation cases. However responsible mortgage companies factor this in and give a well deserved grace period on the deal. This is only fair and should be standard practice, but there a a few companies that are unwilling to recognize their own shortcomings. That's when you have to become relentless, persistent and the nicest bulldog that you can be in order to give your client their best shot. Thanks for stopping by.

Nov 04, 2008 06:28 AM
Pat Whitehouse
RE/MAX 1st Olympic Lynchburg Va - Lynchburg, VA
Broker/Owner

Hi Linda-In this day and age it still amazes me that both parties are not in on the finances that affect both of them. Maybe the ones that bury their heads in the sand just hope it goes away magically. Not too smart. Money problems are a big issue in a lot of marriages and cause many a divorces. I guess I'm too independent and want to know everything, in regards to where all my money goes. This was a very well written post. Thanks for sharing.

Nov 04, 2008 12:04 PM
Linda Bourgault
lulugraphix-creative photography & fine art - Flower Mound, TX

Hi Pat—It's true about the demise of many marriages being attributed to financial woes. I'm afraid we will see more divorces during this time as financial belts tighten and stress factors increase. Like you I continue to be amazed by the lack of shared financial information between couples. Before I married my husband we had serious discussions about how we would handle our money. We were aware of the potential pit falls we would encounter if we did not share similar values and attitudes about money matters. Thank you for commenting.

Nov 04, 2008 01:22 PM