Mortgage loss mitigation leads are most efficient tools that can turn the tides of battle between homeowners and the dreaded foreclosure favorable to the former. Mortgage mitigation leads can be said to be the guardian angels of households as their primary purpose is keeping the homeowner and the home together. However, mortgage mitigation leads should not be dealt with haste and time should be taken to understand them more, because there is no room for ignorance when combating foreclosure.
Mortgage loss mitigation is the act of saving ones home or if such proves to be unachievable, mitigates the losses the homeowner will suffer. Caution should be taken when partnering with companies that claim to offer loss mitigation help because the less you understand about mortgage loss mitigation, the more likely you will fall prey to these predators that seek only to deprive you of your money.
Given below are some facts about mortgage loss mitigation as provided by the federal government to help enlighten homeowners about things they should and have to know.
Assumptions
Assumption of an FHA-insured mortgage is a servicing function where the responsibility or paying for a mortgage is taken over by another person through simple assumption or creditworthiness assumption.
Claims
The vehicle utilized for payment of insurance proceeds from HUD to a Mortgagee is the Insurance Benefit Claim form HUD- 27011. This form is utilized for all submissions of claims for Conveyance of Property and Loss Mitigation Option incentives.
Deed-in-Lieu
A Deed in Lieu of foreclosure (DIL) is a disposition option in which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosure may not be accepted from mortgagors who can financially make their mortgage payments. DIL Fact Sheet
Extension of Time
To comply with required time frames, an Extension of Time may be granted for a mortgagee to initiate or complete a Loss Mitigation (except Pre-foreclosure Sales) and/or foreclosure action. A mortgagee is required to submit to NSC-Oklahoma City, form HUD-50012, Request for Extension of Time, prior to the expiration of the respective time frame to Fax Number (405) 609-8405.
FHA Connection
FHA Connection (FHAC) is a portal used by mortgagees to report on and update the status of their FHA portfolio. In addition, the FHAC facilitates the following Single Family Servicing functions: Claims Processing, Delinquent Loans, HECM Reports, Monthly Premiums, Mortgage Record Changes, Mortgage Calculator, Mortgage Servicing Data Quality system and Lender Query by Case Number. FHAC FAQs.
Foreclosure
Foreclosure should only be considered as a last resort and should not be initiated until all relief options have been exhausted. When foreclosure cannot be avoided, it must be started quickly and prosecuted vigorously to minimize losses to both the mortgagee and HUD.
General Loss Mitigation
This category includes all Loss Mitigation questions that are not specific to one of the five Loss Mitigation Options.
General Servicing
This category includes all General Servicing items stated within HUD Handbook 4330.1 REV-5, Administration of Insured Home Mortgages.
Loan Modification
A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford. Loan Modification Fact Sheet
Partial Claim
Under the Partial Claim option, a mortgagee will advance funds on behalf of a mortgagor in an amount necessary to reinstate a delinquent loan (not to exceed the equivalent of 12 months PITI). The mortgagor will execute a promissory note and subordinate mortgage payable to HUD. Currently, these promissory or "Partial Claim" notes assess no interest and are not due and payable until the mortgagor either pays off the first mortgage or no longer owns the property. Partial Claim Fact Sheet
Pre-foreclosure Sale
The Pre-foreclosure Sale (PFS) Program allows the mortgagor in default to sell his/her home and use the net sale proceeds to satisfy the mortgage debt even though these proceeds are less than the amount owed. Pre-foreclosure Sale Fact Sheet
Pre-foreclosure Sale Variance
A mortgagee is required to submit to NSC - Oklahoma City, form HUD-90041, Request for Variance Procedure, to request permission from HUD regarding any Pre-foreclosure Sale Program exception as well as to request an Extension of Time pertaining to the Pre-foreclosure Sale Program. Variances are considered on a case-by-case basis. Requests are to be faxed to (405) 609-8405.
Single Family Default Monitoring System
Data reported to the Single Family Default Monitoring System (SFDMS) is used to measure the effectiveness of origination and servicing activities, and the potential risk to the insurance fund. For additional information, please see www.hud.gov/offices/hsg/sfh/nsc/sfdms.cfm
Special Forbearance
A Special Forbearance (SFB) is a written repayment agreement between a mortgagee and a mortgagor, which contains a plan to reinstate an asset that is minimum three mortgage payments due and unpaid. Special Forbearance Fact Sheet
Variance
On company letterhead, mortgagees are required to submit to NSC-Oklahoma City any request requiring a variance associated with Special Forbearance, Loan Modification, Partial Claim or Deed-in-Lieu of Foreclosure eligibility criteria or servicing guidelines. Variances are considered on a case-by-case basis.
