According to mortgage financier Freddie Mac, the typical foreclosure cost is nearly $60,000. And officials at HSBC North America, parent of HSBC Bank USA, HSBC Mortgage Corp. and HSBC Finance Corp., say their average loss on sale at foreclosure is 20 percent to 25 percent of the loan’s value.
“We truly believe that foreclosure is the worst alternative for all parties concerned and go to great lengths to avoid foreclosure,” Brendan McDonagh, CEO of Illinois-based HSBC Finance and former chief operating officer of HSBC Bank USA in Buffalo, said in March testimony to Congress. “Financially, it is our worst alternative.”
So like First Niagara, most lenders today have so-called “loss mitigation” departments whose sole purpose is to try to prevent a loss to the bank. But that also means doing whatever necessary, to a point, to help borrowers keep up with their payments and stay in their homes.
“Loss mitigation is working with borrowers to avoid foreclosure,” said Judith Palmer, loss mitigation manager at M&T Bank Corp. “Foreclosure isn’t good for anybody.” via The Buffalo News
This is one more reason why a short sale is the better option!
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