What is Loss Mitigation in New York?

When people struggle with their finances, it can lead to difficult times for individuals and their families. Sometimes, poor financial situations may result in filing for bankruptcy to stop the foreclosure of their home. Having a home is extremely important for a family, so there are ways for people can seek help during this time of need. The Loss Mitigation Program is offered by the Bankruptcy Court in order to help individuals find a solution to their financial problems. It is possible for loss mitigation to save a home from foreclosure and erase certain costs that a debtor may have been required to pay. It is crucial to have an experienced attorney at your side through matters such as these.

What is the Loss Mitigation Program?

Finances can sometimes become very overwhelming. They have the potential to consume people and make it difficult for them to get back on their feet during difficult times. Because of this, the Bankruptcy Court offers options to assist people in finding options. The Loss Mitigation Program allows debtors and lenders to work together in order to reach an agreement that can save the debtor’s house from foreclosure. When this happens, the Bankruptcy Court will watch over the process and step in when they need to.

This agreement is meant to modify an individual’s loans so that they may find a situation that works best for them. The program allows a homeowner to apply for a loan modification, which requires the bank to review their finances. This requires the homeowner to provide the bank with:

  • Financial statements or profit & loss statements
  • Personal bank statements
  • Paystubs from wage earners in the family
  • Tax returns
  • A current utility bill to prove residency
  • A hardship letter

After this, the bank may determine whether or not the homeowner is eligible for a government or bank loan modification, a loan refinance, short sale, surrender of property, or a combination of these options. It is important to note that banks will not approve of an application for a loan modification if they believe the debtor does not have an income sufficient enough to meet monthly mortgage payments.

Am I Eligible?

Debtors that file for Chapter 7, 11, 12, or 13 bankruptcy may participate in the Loss Mitigation Program so that they may work towards a resolution. Individuals are able to join the program if they have a real property that is used as their main residence.

Contact our Firm

If you are facing bankruptcy and wish to apply for the Loss Mitigation Program, contact the Law Offices of Allen A. Kobler, Esq. today.

If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.