B of A Mitigation of Loss conversation.

[day2day]

Hi all...it's only my second post, so I am not all that familiar with everything the board has to offer. With everything in the paper and news recently, i.e. banks willing to help homeowners, the possible cost of foreclosure for banks 60k+, and such...I thought I would call the Mitigation Loss Dept to discuss a preemptive solution of my mortgage situation. Just to see what they had to say.

There wasn't a direct number supposedly to the Mitigation Loss department(who make the decisions on renegotiating a mortgage) but could not get past the collection lady.

She reviewed my account, and saw I wasn't past due on anything. I explained my sitation(new baby on the way, loss of job, etc.) and that I wanted to be pre-emptive.

She told me to fax a hardship letter asking what I wanted to accomplish to the Mitigation Loss Dept but they would most likely say no.

I asked her if they would lower an interest rate, she said no. I asked her if they would forgive some of my loan, she said no. I asked her what they WOULD do? She wouldn't say. She just said they are very busy.

I asked her if I should become deliquent on my account so they would take me seriously, she said no.

Was I not talking to the right person? Will a company like B of A renegotiate, or will they take a 60k+ loss instead on a foreclosure?

[lrprn]

Typically mortgage lenders will not consider any negotiation in mortgage terms until you are at least 3-4 months in arrears. Otherwise everyone would be calling them claiming "my circumstances are changing" to get lower payments.

Now with the current mortgage crisis lenders are still holding the hard line but are getting more nervous about more foreclosures as they continue to mount.

You would think that renegotiating a mortgage would be no big deal, but because lenders are very concerned about how their figures appear to stockholders and because loans are often held outside the bank by shareholders, renegotiating them is actually quite complex for the bank. The renegotiation of multiple mortgages can negatively impact their reliability appearance to stockholders more than accepting the risk of your potential foreclosure does.

Accept the fact that no matter who you spoke with, you aren't going to get much (if any) traction until you are in serious arrears on your loan. And even then, the lender may choose to foreclose and write off the loss on their taxes recoupling more than renegotiating your loan. Welcome to the world of today's over-extended lending finances.

[HHM]

lrprn is correct, most lenders will not even connect you to loss mitigation until there is an actual threat of loss...i.e. that you are in arrears.

If you haven't already, read this post on Foreclosure Workout Agreements.

http://www.bkforum.com/showthread.php?t=11877

You may also want to visit the HUD website http://www.hud.gov/ and start poking around on what your options might be for mitigation.

Do you have a way to document the job loss? If you can document these events (the baby thing is a non-starter, that is just life, but when a source of income goes away, or something bad happens, it helps to be able to document these to the lender), you might be able to get some traction. Also, be persistent, you talked to the gate keeper (there job is to tell you no in hopes of you going away) and there is a record of the call. If you keep calling, keep your story consistent, offer to document the problem, you might eventually get to the right person. Realize, it will take some time. But if you are serious, keep at it.

[yak411]

Well I am in a 13 currently and called my 1st mortgage holder and asked for a freeze on my ARM interest rate. I am upside down on the house (20K) Owe Greenpoint 220K and GMAC 55K. I was told by the representative that she only knows of 2 cases where the interest rate was frozen. I can't believe this. I mean they would rather let the home enter foreclosure than to allow an interest rate freeze (which allows me to afford the loan). Anyway I will be surrendering because I have no option. So much for trying to "work it out". The foreclosure should not touch Greenpoint because they will get the full 220K in the foreclosure but GMAC will be lucky to get a dime after realtor fees and negative equity. Any suggestions?

[holding on]

The catch-22 of this all is that every mortgage expert says to contact the lender early to possibly workout arrangements, but as mentioned previously, that amounts to nothing in the early stages because then everybody would be asking for a mortgage rework.

So you are most likely talking to the right person, just that that person's responsibility is to convince you that there is no hope of negotiation so that you will somehow come up with the money to pay what's needed.