As programs like loan modifications and short sales grow in popularity, a good question to ask is why some people are given a loan workout while others are denied. A big part of it is that people don’t know how to negotiate with a lender and do the wrong things on their way to being denied. Another aspect is going after the wrong program. Each borrower is unique and has certain things that will work and others that won’t.

Loan workouts take more than just asking nicely. You have to craft a picture that includes finances and hardships. It has to presented to the lender in such a way that convinces them to work something out.

With that said, there are some principle things to consider on your way to working out a solution.

It’s about the money

The first thing you have to realize is that it’s all about the bottom line. A lender is willing to work with you on a solution if it makes sense to their own bottom line. It sounds harsh, but it’s the truth. The good news for borrowers in trouble is that foreclosure is expensive to the lender and more times than not, they consider it an unfavorable outcome. That leaves a litany of other workouts that a lender is willing to negotiate. Short sale, short refinance , loan modification, deed-in-lieu of foreclosure and forbearance are all common loss mitigation programs that have their own pros and cons. AMG focuses on the first three as preferred programs.

It’s about your ability to pay

Your finances are going to be front and center in any potential loan workout. The lender wants to know where every penny is coming from and where it’s going to end up. If they are to offer a workout for your situation, they want to be sure it’s a worthy investment. There are some things you may want to cut out from your monthly bills:

• Excessive vehicle payments (less car is a good idea)
• Cell phones
• Cable TV
• Restaurants
• Inessential purchases

Stick to the necessities. Lenders want to see you making a serious effort to find room to make your monthly mortgage payment.

It’s about where you live

In places where it’s harder to sell homes on the market (California, Florida, Nevada), chances are better of a loan workout agreement being reached. Why? Because if a lender ends up with the deed to the home, they have to sell it to recover their investment. If the home can’t sell, they’re stuck. That’s guaranteed incentive to get a solution worked out. Lenders are acutely aware of market activity and will know what is and isn’t working in certain regions.

It’s about your commitment

No doubt, a situation where you can’t pay your mortgage flat-out stinks. If you can face the fact you need help and are going to have to make some sacrifices, you can probably working something out. If you’re in denial and unwilling to realize that times have changed, you could be in big trouble. Be willing to humble yourself a little bit. A strong commitment to getting things fixed will go a long ways toward getting you back on track.

Struggling to pay your mortgage can be a difficult thing to cope with. Many people choose to bury it and hope a solution presents itself or it just goes away altogether. Meeting the issue head on and admitting you need to do something can be hard, but you’ll be glad you did.

As the housing crisis worsens throughout the country, more attention is being paid to getting assistance to those in need. Programs such as loan modification and short sales have grown in popularity and lenders are ramping up those departments to handle the volume of requests. We are providing a service that lets you be proactive about your situation and find a solution before you’re out of time and options.

We mention all this to assure you that there is help and there are things you can do about your situation, but you have to want help. We find too many people that don’t realize the urgency of their situation or aren’t willing to admit they need to do something.

Those who fail to take action often times meet with the direst of circumstances and become another number in the housing market crisis. Don’t let that be you.