Loan Loss Mitigation

Loan loss mitigation or reduction is the term used by the lenders to refer to the act of trying to reduce their losses from a loan. The lender has a department that is charged with doing everything it can to reduce its losses on a non-performing loan. A non-performing loan is a loan that is not being paid.

The loan loss reduction department is authorized to work with you in order to get the loan current. To save your home, you should talk to these people as soon as you can. They can allow you to go a few months without paying (forbearance) without starting the foreclosure process. They can also work out a payment plan so that you can pay off the months you've fallen behind. They can allow you extra time to sell your home if you're in the process of doing so.

There are many things they can do for you, but you must call them and let them know your situation, before they can work with you. The sooner you call them the better.

When you call your bank, ask to speak to someone in the Loan Loss Mitigation Department. These are the only people that can help you. Don't let anyone else give you the runaround. Usually, they'll try to connect you with someone in the collection department who'll try to get you into a payment plan that you'll soon realize you can't afford. The agents in the Loan Loss Prevention (Mitigation) Department are authorized to work with you in order to help avoid a foreclosure which is detrimental for both you and the lender. They are authorized (or can get authorization from the investor on the loan) to prevent that foreclosure by any means possible including: lowering the interest rate, reducing the payments for a period of time and even cutting the principal (the loan amount). It will be worth your while, to talk to these people.

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