Loss mitigation refers to a range of methods designed to help struggling homeowners get their mortgages back on track. The recent housing crunch brought an increased demand for loss mitigation services, especially in hard-hit areas like Southern California. This guide answers some of the most commonly asked questions on loss mitigation and foreclosure prevention today.

Who needs loss mitigation?
Anyone who has trouble making payments on their mortgage, even if it’s still current, can benefit from loss mitigation. Some banks will require you to be at least a few months behind before they can help, but it helps to know your options early on.

What kinds of loss mitigation are there?
There are several ways to go about loss mitigation, but some of the most popular are loan modification, short sale, and deed in lieu of foreclosure. A loan modification changes your mortgage to lower monthly payments, while a short sale lets you sell your home at a discount and use the proceeds as full payment. A deed in lieu is a “last resort” approach where you simply turn the home over to your lender, who considers the debt paid.

How do I get loss mitigation assistance?
The first thing you need to do is call your bank’s loss mitigation department, the service that deals with delinquency and other lending problems. Ask about the kinds of loss mitigation they offer and how you can qualify. Each bank has its own rules, so make sure to provide as much detail as possible.

Do I need representation?
It’s possible to deal directly with the bank’s loss mitigation office, but most people choose to work with an attorney. Loss mitigation attorney helps you get in touch with the right people and prepare your case to better convince your bank that you deserve assistance. Look for a loss mitigation attorney who has considerable experience, especially with cases similar to your own, and has the right connections to help you get things done.

How much does it cost?
The costs of loss mitigation vary greatly depending on the process and the borrower’s financial situation. Loan modification, for example, can cost anywhere from $800 to $8,000. There are also banks’ service fees, attorney fees, and courier fees to consider. The best thing to do is call up your bank and ask for an estimate of the total costs, and compare it with the amount you expect to save from your loss mitigation plan.

–
About the Author:
The Author is a Loan Modification Specialist, who writes on various Loss Mitigation related topics to help people understand the Loan Modification process and help them save their homes from foreclosure. For more helpful articles visit the author’s blog at http://loan-modification-assistance.blogspot.com
Article Source

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

We hear this question a lot from clients who live in condominiums or communities that require the homeowner to be a part of a home owners association (HOA) to share communal maintenance fees. And if they don’t ask we let them know anyway.

Unfortunately, the answer is yes.

HOA fees are fees that arise from a contract between the homeowner and the HOA. Under the bankruptcy code HOA fees that accrue after you file for bankruptcy are the responsibility of the homeowner.

As came to head through Huntley v. Snyder (.PDF), the code [11 USC 523(a)16] excepts from discharge:

Any debt for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor’s interest in a unit that has condominium ownership, in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot.
 

What this means for you?

You will be responsible for HOA fees from the time between filing your discharge and when your lender actually forecloses on your home, as you remain the legal owner until foreclosure or some other transfer of title occurs (i.e. short sale or deed in lieu).

You are probably now wondering, well, how long will that take?

Sadly, only your lender knows for sure. Depending on how far into the foreclosure process you are when you file and when the lender can get around to setting a foreclosure date it can be a matter of weeks, months, or even a year. I have had more than one client whose home did not sell at foreclosure until a year after the bankruptcy was filed.

 
Anything else?

The good news is you can remain in your home without having to pay a mortgage until the foreclosure takes place, so HOA fees are a relatively small price to pay. Additionally, HOAs are sometimes willing to negotiate a settlement of the amount of fees due, however that is more likely when you actually move out of the home.
 

So, what are some solutions to dealing with these post-filing HOA fees?

File the bankruptcy after foreclosure takes place
Pay the HOA fees as they come due
Try to negotiate a short-sale or deed-in-lieu with your lender before foreclosure takes place as the HOA fees will have to be taken care of as part of the negotiation
Save up money to the best of your ability, and be prepared to pay the fees if/when the HOA attempts to collect.

Linda S. Klinger, Esq. had a career in publishing before obtaining her law degree. Upon graduating law school Linda practiced civil litigation and intellectual property law. However, as many first year attorneys can attest, the long hours and lack of pay created undue personal hardships similar to many of her current clients. At that time, Linda decided that she would use her education to help people and give back to the community. By taking a direct, one on one approach with people, Linda has helped provide a fresh start to countless families that have become her clients.
Article Source