The Loss Mitigation Department vs. the Foreclosure Department

What is the difference between these two departments? Most banks have both. The loss mitigation department works on finding ways to avoid foreclosure on properties. On your short sale offer, you will be waiting for an answer from the loss mitigation department at the short sale lender for the approval of the short sale. However, you quite possibly could be competing with another department inside the same bank! The foreclosure department works to prepare properties for foreclosure. If a homeowner has missed enough payments, his/her bank will start the foreclosure process and schedule a foreclosure auction date. If another solution has not been reached by the foreclosure auction date, then the property will go to auction at the county steps. What if you get short sale approval from the loss mitigation department but your transaction doesn't close until after the foreclosure auction? Too bad! You just lost your right to purchase the property. You and your agent should do everything possible to make sure the two departments at your short sale lender(s) are communicating and that everyone is on the same page. Sometimes the loss mitigation department will ask the foreclosure department for an extension of the foreclosure auction date. You want to see these things in writing. Some banks are starting to streamline these steps more than others, but don't count on your short sale lender to be the one that has. Make sure you and your exclusive buyer agent are communicating with the listing agent and bank representatives regularly to avoid any confusion and any unwanted outcomes!