The trustor or mortgage holder needs to repay a delinquent portion of a loan as a result of impending default, foreclosure, bankruptcy, REO, and so on. Before a foreclosure or bankruptcy occurs after a one or two months default, a repayment plan may be proposed to the delinquent mortgage holder by a loss mitigation specialist to satisfy the amount owed to a bank or lender. Loss mitigation may prevent foreclosure or bankruptcy.

The loss mitigation specialist can be a real estate agent or broker, bank officer, attorney, paralegal, or anyone that has been trained and has experience with a loss mitigation business opportunity. Loss mitigation specialists should be investigated by the consumer regarding prerequisite experience, knowledge of repayment plans, and experience in dealing with banks and lenders. Knowledge of real estate financing and laws, good communication skills, and so on, is essential in being effective.

Another tool available to the homeowner was the filing of a Chapter 7 or 13 bankruptcy. This would automatically "stop" or "stay" a foreclosure from occurring. But since the new inception of bankruptcy laws, this process no longer exits for the homeowner or mortgage holder.

The foreclosure loss mitigation specialist can provide multiple strategies for fulfilling loan repayments depending on the type of loan debt or delinquency. He or she can provide a loss mitigation business opportunity for a prospective buyer or investor. Let's identify and define some the ways a homeowner may become delinquent in paying off his or her mortgage.

Currently, it seems like almost anybody can get a mortgage loan. Historically, monthly mortgage loan payments consumed about 25% to 30% of a wage earner's paycheck. Today, it's more like 50% to 60% of a person's income every month that goes toward paying off a mortgage. But since real estate prices have gone up almost exponentially over the past few years, house appreciation has offset this income to debt ratio.

Creative loans and financing in its several forms blast the airwaves. No money down, first-time buyers, 80/20 programs, and others, exploit the uninformed. Many people who live paycheck to paycheck are ignorant that these programs contain risky repayment or interest rate schemes that come due sooner than later. A temporary loss of a job or a hardship illness can quickly push the homeowner into mortgage delinquency.

The loss mitigation specialist can go to the bank or lender and state his client's case. He can propose repayment plans to fit both his client's and the lender's needs. Time is key. All key parties should act expeditiously to find resolution before a loan default occurs. Either the homeowner knows about loss mitigation and seeks debt relief in a timely manner, or the loss mitigation specialist is versed at seeing signs of foreclosure in his proximity to the real estate market and acts on them.