Loss Mitigation Options
Foreclosure is rarely the only option. Learn about every path available to you — and how we can help you access it.
What Is Loss Mitigation?
"Loss mitigation" is an umbrella term for any program, agreement, or arrangement that allows a homeowner to avoid foreclosure on a defaulted mortgage loan. These options can range from adjusting the loan terms to allow you to stay in your home, to structured programs that help you exit the property without a damaging foreclosure on your credit record.
Not every option is available in every situation. Eligibility depends on factors including the current state of your loan, your income, the equity in your property, and the nature of your hardship. Our team will evaluate your full picture before recommending a path forward.
Available Loss Mitigation Programs
We evaluate every option before recommending one. Here's what may be available to you.
Loan Modification
A loan modification permanently changes one or more terms of your mortgage — such as the interest rate, the loan balance, or the repayment period — to make your monthly payment more manageable.
- May reduce your monthly payment
- Can lower your interest rate or extend your term
- May capitalize past-due amounts into the loan balance
- Allows you to remain in your home
Best for: Borrowers who have recovered from a temporary hardship and can sustain a modified payment going forward.
Repayment Plan
A repayment plan allows you to catch up on past-due payments over a set period by adding a portion of the past-due amount to your regular monthly payment.
- Keeps your original loan terms intact
- Structured timeline to cure the default
- No modification to existing loan documents
- Typically shorter-term (3–12 months)
Best for: Borrowers who fell behind due to a temporary setback and now have stable income to support slightly higher payments.
Forbearance Agreement
A forbearance agreement temporarily reduces or suspends your mortgage payments while you recover from a qualifying hardship, such as job loss, medical emergency, or natural disaster.
- Payments paused or reduced temporarily
- Foreclosure action is halted during the period
- Past-due amounts addressed at end of forbearance
- Time to stabilize your financial situation
Best for: Borrowers currently in crisis who need immediate relief and have a realistic plan for recovery.
Short Sale
In a short sale, you sell your property for less than the outstanding mortgage balance, with the lender agreeing to accept the proceeds as full or partial satisfaction of the debt.
- Avoids foreclosure on your credit history
- You control the sale process
- Potential for deficiency waiver
- Less damaging than foreclosure to future creditworthiness
Best for: Borrowers who can no longer afford the property and whose home value is less than the outstanding loan balance.
Deed-in-Lieu of Foreclosure
A deed-in-lieu involves voluntarily transferring ownership of your property to the lender in exchange for release from your mortgage obligation — without going through foreclosure.
- Avoids public foreclosure proceedings
- Generally faster than short sale or foreclosure
- May include cash-for-keys relocation assistance
- Clean exit from the loan obligation
Best for: Borrowers who need to exit the property and cannot complete a short sale within an acceptable timeframe.
Loan Reinstatement
Reinstatement means paying all past-due amounts, fees, and penalties in a single lump sum to bring your loan fully current and restore it to its original terms.
- Immediately resolves the default
- Preserves your original loan terms
- No modification documents required
- Stops any pending foreclosure action
Best for: Borrowers who have access to a lump sum — such as from a tax refund, retirement distribution, or family loan.
Short Payoff
A short payoff allows you to settle your outstanding mortgage balance for less than the full amount owed — without necessarily selling the property. The lender accepts a negotiated lump-sum payment as satisfaction of the debt.
- Eliminates the remaining balance immediately
- Stops further interest accrual
- Provides a clean resolution when full payoff is not feasible
- Faster and more flexible than a short sale
Best for: Borrowers who have access to a partial lump sum but cannot satisfy the full balance owed.
Cash-for-Keys & Relocation Assistance
If transitioning out of the property is the right path for you, River Flow Funding can provide financial assistance to support a smooth and dignified departure — on a timeline that works for both parties.
- Financial assistance provided at move-out
- Flexible departure timeline negotiated together
- Additional relocation support to help you get settled
- Avoids the trauma and cost of formal eviction proceedings
Best for: Borrowers who are ready for a fresh start and want support making the transition as manageable as possible.
How to Apply for Loss Mitigation
The process begins with a simple form. Here's what to expect.
Submit the Borrower Intake Form
Provide your contact information, loan details (if known), a description of your hardship, and a basic summary of your income and expenses.
Document Gathering
A representative will contact you and request supporting documents — pay stubs, bank statements, tax returns, and a formal hardship letter.
Review & Decision
We review your complete package and present the options available to you. There is no obligation to accept any offer.
Agreement & Implementation
Once you select a resolution, we prepare the agreement and coordinate with the servicer to put it in place.
Ready to Get Started?
The sooner you reach out, the more options remain open to you. Our borrower intake form takes about 5–10 minutes to complete.
Complete the Borrower Intake FormPrefer to call? (888) 438-0026