The optimal form of a particular successful loss mitigation workout is highly dependant on the circumstances of both the borrower and lender. Initial questions should typically include whether the problem is short or long-term in nature? Is the problem really caused by an inability to clear arrears fast enough to forestall foreclosure? If foreclosure appears inevitable, are there means to replace the borrower, or to mitigate the loss that foreclosure would entail? The following are examples of some of the methods used to successfully put borrowers sustainably back into current status:

• When the borrower has a temporary problem.
• Reinstatement: accept the back payments, default fees and costs if received by an agreed date.
• Forbearance: reducing or suspending payments for a set period. This is often used in tandem with reinstatement to enable the borrower to overcome a temporary problem.
• Repayment Plans: effectively adding past due amounts to future repayments over a period. This assists borrowers who suffered a temporary financial setback, where the setback is past but there are insufficient funds to fully reinstate immediately.

• When the cause is likely of indefinite duration.
• Mortgage Modification: the terms of the mortgage are adapted to reflect the realistic payment potential of the borrower. Common changes include the length of the term, adding past due amounts to the outstanding principal and revising the interest rate.
• Short Refinance: forgiving some of the debt while rolling the remainder and the original loan into a new loan on sustainable terms. While this involves some loss to the lender, it is considerably less than would have occurred from foreclosure.
• Claim Advance: if the mortgage is insured, the insurer may advance the default amount as a loan to be used to render the loan current. Such loans may defer repayment for several years.
• Reverse Mortgage: it may be appropriate for an older mortgagee with substantial equity to liquidate cash by effectively allowing another party to purchase equity in the property in installments while allowing the borrower to remain in the property.

• If the circumstances suggest that the borrower cannot sustain refinancing, traditionally foreclosure sale becomes inevitable, yet methods are available to ensure foreclosure costs are avoided or minimized:
• Assumption: once common but now precluded by non-assumption clauses in most mortgages, here the lender waives this clause enabling a suitable buyer to replace the original borrower as the mortgagee.
• Sale: the lender grants the borrower a specific amount of time to find a purchaser and repay sums outstanding using proceeds from sale on the open market to clear the outstanding balance.
• Short Sale: in some cases the expected sale will not cover the outstanding balance. Open market sale may still be less costly than foreclosure and REO sale.
• Deed-in-Lieu: where there are no other liens, the borrower surrenders the property voluntarily in return for the debt being forgiven. This moves the property to REO without the cost or delay of foreclosure.