If you stop making your mortgage payments, you could be facing foreclosure. “Loss mitigation” is where we work with you to avoid that. This article explains what you need to know about loss mitigation—and what you need to do.
If you don’t work in the mortgage-servicing industry, you may not be familiar with the term “loss mitigation.” But if you ever stop making your mortgage payments, you’ll hear it often. That’s because loss mitigation is the process where we work closely with you to try to mitigate (or, reduce) the terrible losses that result if your home goes into foreclosure.
The goal of our loss-mitigation process is to help you avoid foreclosure—which causes significant loss for both you and your lender. A loss-mitigation effort that avoids foreclosure provides great benefits:
Your lender benefits by keeping the income stream from your mortgage payments. They won’t have to spend lots of money to take control of your property through foreclosure. Also, they won’t have to sell your foreclosed property—which could sell for much less than its true value.
You benefit by avoiding the huge hassle and expense of foreclosure. Some loss-mitigation plans—such as a loan modification, a forbearance, or a repayment plan—enable you to stay in your home. Other plans—such as a short sale or a deed in lieu of foreclosure (DIL)—allow you to give your property back to your lender without going through foreclosure. Foreclosure can also damage your credit score for future purchases.
What is foreclosure?
If our loss-mitigation (or, “loss mit”) efforts can’t get you current in your mortgage payments, you may be facing foreclosure. Foreclosure is a court-ordered legal process in which you give up your home to your lender and move out (we represent your lender during foreclosure). If you don’t leave your property willingly, you will be evicted—and you may still have to repay what you owe on your mortgage.
On behalf of your lender, we're required to report your foreclosure to the consumer reporting agencies (Equifax, Experian, TransUnion, and Innovis). As a result, you may not be able to get another mortgage loan for up to seven years.
Concerned about missing a payment? Call us!
Please contact us right away if you might miss a payment! Many of us are homeowners ourselves, and we understand that financial problems can hit without warning. Please call our toll-free number at 800-365-7107 if you are facing financial challenges. We're here to help! Give us a chance to help you before your find yourself in a crisis.
We’ll assign an expert to help you.
After you’ve been behind in your payments for 45 days, we assign one of our highly trained mortgage specialists to guide you through our loss-mit process. We call that person a SPOC (single point of contact). Your SPOC will carefully study your situation and will tell you—both in writing and by phone—about every loss-mit option you may qualify for.
Your SPOC is always available by phone or email during the loss-mit process—to answer your questions, help you fill in your application and forms, and lead you through the ins and outs of loss mitigation. Your SPOC will also help you understand what will happen—and what you need to do—if our loss-mit efforts don’t succeed and we have to foreclose on your property.
Use our website to apply.
The loss-mit process starts with your online application:
- If you have not yet set up an online account with us, click Register to display the Account Registration page. Enter the username of your choice and your email address; then click on the Create Account button and follow the on-screen prompts.
After you create your account, you’ll see the Account Summary page. Click on your Loan Number to display the Your Loan Details screen; then click on the Request Payment Assistance option in the upper right corner to go to the Homeowner Assistance Solutions page. Review the options shown, and pick the one that best fits your situation. Click on Get Started to apply. Call or e-mail your SPOC if you need help.
- If you already have an online account with us, sign in as normal. From the Account Summary page, follow the instructions noted above (in the previous paragraph).
Did you work on loss mitigation with a previous servicer?
Did your loan transfer to us from another mortgage servicer? If you were working with your previous servicer on a loss-mit plan—or if they approved a plan before your loan transferred—please call us right away at 800-365-7107. We’ll follow up with your previous servicer to get any additional information we need to make sure your loss-mit plan gets the attention it needs.
You’ll need to send us some forms and documents.
Along with the contact information for your SPOC, we’ll mail you a “loss mitigation package.” It’s a packet of documents that includes a letter with detailed instructions about what you need to do that includes several forms you need to fill in and return to us. Be sure to carefully read your letter and closely follow its instructions.
Your letter will explain the details, but after you complete your online application, you'll need to fill in some forms and send us some documents, such as:
- Copies of your two most recent paystubs (if you have a job where you earn a salary)
- A profit-and-loss statement (if you're self-employed)
- Copies of your two most recent bank statements
- Income, expense, and asset information for every person named in your mortgage contract
- A financial worksheet that shows how much money you make and how you spend it
- A written description of the financial problems that prevent you from making your mortgage payments.
Learn more about alternative payment plans—and get free expert advice.
Are you struggling to make your mortgage payments? Don’t give up hope! We have a wide range of alternative payment plans. During our loss-mit process, we’ll help you find one that works for you and your family. Read more about our loss-mit process and various alternative payment plans in this article.
You can also learn more about your options with this interactive video.
We also recommend that you meet with a financial counselor to make sure you understand the details of loss mitigation and foreclosure in your area. To learn more about how to get free expert mortgage counseling (in-person or by phone), read this helpful article about the top 10 tips to avoid foreclosure.
Want to avoid foreclosure? Let’s talk before it gets serious.
Don’t wait until you start missing payments to call us. Your lender hired us to service your loan, and we can assure you that we want to work with you. We’re available Monday - Friday from 8 a.m. - 9 p.m.; our Saturday hours are 10 a.m. - 2 p.m. (all Eastern time). Our toll-free number is 800-365-7107.