When negotiating with your lender for a loan modification, commercial loan workout, or a short sale, it pays to step into your lender’s shoes for a little while. The insights you gain will help you tremendously, and make it easier to reach your goals.
Your lender has its own problems. Cash flows are down, personnel costs handling problems loans are going up dramatically, assets (that’s what they call loans and mortgages) are rapidly losing value, their investors are nagging them constantly, and the federal government seems to have its fingers in everything.
This is just like your situation: Income is down, expenses keep going up, your stuff isn’t worth as much as it used to be, your spouse/in-laws/partners/etc are nagging you all the time, and the federal government/IRS seems determined to add to your grief.
Everyone has the same problems. You CAN step into your lender’s shoes, understand their problems, and use that knowledge to reach your own goals.
For each problem a lender has, you have a leverage point. You can assist in solving that problem. In exchange, you can use your assistance as a bargaining chip to get what YOU want in the negotiations.
Every loan and every deal is different.
Back when my husband was an active real estate developer, he constantly asked me, “What do bankers think about when they evaluate whether to loan money or not? I can’t seem to find any consistency in their decision-making.” He’d been turned down for loans on great deals. He’d borrowed lots of money on far riskier deals. It didn’t make any sense. I told him I didn’t know, all my experience was in bad loans and loan workouts, so I knew what lenders thought on the back-end of a loan, not on the front-end!
I’m betting many of you are now asking questions similar to my husband’s. You’re asking, “What do lenders think about when working out a loan, or approving a residential or commercial short sale?”
I’ll tell you what your lender is NOT thinking! They are not thinking, “We hold all the power and the borrower better toe the line or they’re going to be road kill.”
So what DO they think? It’s WAAAAAAYYYYYY more than I can tell you in a blog, because there are so many moving pieces.
Just know this: every time I represented a borrower, I learned everything I could about the lender before we opened negotiations. It always paid off with the ability to propose solutions that met our needs, and those of the lender. Step into the lender’s shoes for a few minutes, and see dramatic successes in your workouts.