What is the alleviation of loss?

When the house owner goes to the default value on the mortgage and faces the closure of the market, the mortgage creditor will try to reduce his loss as much as possible. Relief of losses is the attempt to recover as much of the loan value as possible, knowing that they are likely to suffer certain financial losses, but that the loss will be less than if the loan increased until closed.

Most of the main mortgage lenders have a department to alleviate losses that work on negotiating conditions with the house owner to prevent the market. There are several types of mitigation that can be used, and perhaps the best known type is short sale. Short sale means that the creditor accepts less than what is owed on real estate as a complete repayment of the loan. In other words, payment is the lack of what is owed, ie "short" sales.

Very often in the short sale process, the real estate investor will act on behalf of the house owner who faces closure. The investor is preparing the information that the creditor needs, ABY has considered the agreement, and in a successful short sale the creditor accepts the conditions of the investor to buy a property. This reduces the financial loss of the creditor, prevents homeowners from losing the house and investor profits from the purchase of real estate for less than its market value.

Other types of loss alleviating include the modification of the loan, where the interest rate, the main loan balance and other loan conditions and the special tolerance, where the monthly payment of the house owner is reduced or may lack one or more payments. The main focus of any of the several available options is to keep the homeowner in their house, minimizing losses for all involved.

Loss alleviation was originally introduced as an effort to cooperate between the federal government and the mortgage industry. Mortgage borrowers have been used for many years, but have experienced rapid growth since the end of 2006, when the confiscation rate in the United States dramaticallyHigh and hundreds of mortgage companies were forced to bankruptcy or business. Despite this fact and perhaps because of this, creditors are first aimed at finding a way to keep the house home. Most often, measures can be taken to this goal by an advisor to alleviate loss, while the closure of the market is the last option.