Loss Mitigation is term you will want to be familiar with if you are faced with foreclosure. The loss mitigation department at a bank is responsible for keepingthe bank from having to file foreclosures. Why do banks need loss mitigation departments? Because foreclosure is expensive, expensive enough to create a loss for the bank. Loss mitigation departments "mitigate" or effectively minize losses which the bank would incur if it had to foreclose up on the property. Loss mitigation departments first and foremost are there to workwith create payment plans which can help you catch up on your past due mortgage paymets and get back on track. If a payment agreement or forbearance doesnt work, most loss mitigation departments may be willing to discuss a short sale of the property.

Loss mitigation departments are sometimes referred to as the work-out department, foreclosures department, short sale department, loan modification department, or reinstatement department

 

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