Finance
What is 'loss mitigation' in Delaware mortgage servicing?
AThe process of mitigating the loss of a property's value over time
BOptions offered by mortgage servicers to help distressed borrowers avoid foreclosure — including loan modifications, repayment plans, forbearance, short sales, and deeds in lieu of foreclosure✓ Correct
CThe process of reducing property insurance losses through risk management
DA Delaware state program reducing mortgage losses for lenders
Explanation
Loss mitigation refers to the alternatives to foreclosure that mortgage servicers offer to distressed borrowers. Options include: loan modification (permanently changing loan terms), repayment plan (catching up missed payments), forbearance (temporary payment relief), short sale (selling for less than owed with lender approval), and deed in lieu (transferring title to the lender). Delaware's foreclosure prevention programs also assist struggling homeowners.
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