What is Loss Mitigation?

It’s a concept made up of two components:

  1. Limiting actual costs and expenses incurred by the lender on “at risk loans”.
  2. Reducing the lenders exposure to risks tied to real estate ownership

Each lender approaches loss mitigation with their own set of goals and priorities. Some will move aggressively to cut losses and limit risk by pushing short sale files to conclusion quickly. Others will proceed with caution on short sale files, placing a high priority on approving only those files with horrendous hardships and desperate financial circumstances. It all comes down to how a particular lender views the idea of mitigating loss.

Each loss mitigation department will operate with slightly different policies and protocols. Sometimes you’ll be assigned just one case manager that you’ll speak with all the time, other departments have a pool of case managers that work on all files in the department. Each style of operation has advantages and disadvantages, but always remember that the loss mitigator has a position of authority and you will be most successful if you accept the loss mitigator’s style and approach.


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