| Understanding Mortgage Loss Mitigation or the ‘Short Refinance’ Process |
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In brief, loss mitigation is the process of getting the amount of the mortgage(s) in line with the value of the property; and at the same time, getting the interest rate(s) in line with the current market. The goal is to keep the home owner in the home. Loss mitigation, done correctly, helps stabilize neighborhoods and values within neighborhoods. Additionally, loss mitigation cuts the losses incurred by the mortgage servicing company and the investor. Finally, loss mitigation reduces the expense of corporate advances and holds intact servicing fees. Home owners may be exposed to many financial pitfalls and dangers. For example, a potential deficiency judgment must be negotiated to be forgiven. Between now and the end of 2009, by Federal Law, there can be no income taxable event on a forgiven deficiency or deficiencies. More discussion and facts are available on our web site (below). |
