Like holding your breath underwater, homeowners facing foreclosure are desperate for air. While the solution of coming up and taking a breath seems simple, the work needed to get out of water can be a challenging journey. Many struggling homeowners face the journey of avoiding foreclosure and seek help to prevent it, thus beginning the quest loan workouts and restructuring.

When the pressure of foreclosure begins to mount, the goal becomes as clear as a ray of light on a cloudy day. Fix the loan. It is at this point where the journey becomes a cat-string game, the excitement of lenders dangling the string (loan details, interest rates) over the cats (borrowers) heads and the cat making desperate attempts to grab hold of the string and gain composure once again. Essentially, avoiding foreclosure comes down to numbers and the fact that what is best for the borrowers is often not in the best interest of the lenders.

With that in mind if you are feeling the pressure of foreclosure mounting down on you, the first step you need to take is having a discussion with your lender, sit them down and talk numbers. While with your lender present your financial situation. Show the lender details about your income, where your money is being extended to, and what your family spends on food, clothing, car payments, credit card debt, and student loans. Homeowners also need to present copies of their pay stubs, bank statements, and utility bills to back up their claims. Homeowners will need to make some changes in order to stay in there homes, so say goodbye to premium cable packages and give up your expensive habits because it is time to buckle down.

Once a tighter budget is established, you should be left with an amount that serves as a safety net. The idea is to have borrowers have the ability to pay all their expenses with a little money left over. For example, if a homeowner has $3,000 in monthly income, $1,400 in household expenses and puts aside $200, there is at least $1,400 remaining for a housing payment. In the end, your lender will give you a new amount and determine whether or not you can afford to keep your home.

Like the saying goes "life comes at you fast," sometimes whether it's because a borrower is in too deep or because a household's income sees a decline due to a job loss, there just isn't any reasonable solution. Even with a 0% interest rate, some owners still would not be able to afford the loan. However lenders look to help by comparing borrower's monthly housing allowance with a range of available solutions, looking for their (the lenders) cheapest option, planning to give borrows what they need and nothing beyond that. Lenders look to keep borrowers in their back pockets by placing them on repayment plans, which allow borrowers to make up missed payments without altering the terms of the loan or reducing the revenue that loans generate for investors.

Repayment plans work best in getting homeowners on a path to keep a steady flow of money rolled back to lenders pockets as well as helping those who are living beyond their means. Let's face it, getting through life without some small amount of debt or having a period of time where you actually can afford your lifestyle is not reality for most of us.

There is always an option of finding additional loans if restructuring happens to not work out. Another option is to extend the length of the loan. For example, extending a loan from 30 to 40 years would potentially knock $100 a month off the payment on a $200,000 mortgage. Congratulations, now you can actually afford a weeks worth of gas. Other borrowers may be able to afford payments at the teaser interest rate on their adjustable rate mortgages (ARMs), but not at the higher, reset rates. For example, a $200,000 loan at 6% might cost $1,200 a month, but if that rate resets to 8% the payments climb to $1,570. For them a rate freeze keeping the payment at $1,200 may be the best option. Some lenders offer five year freeze on rare occasion, but mostly make modifications out of two-year freezes.

The new trend seems to be that servicers are hoping to recover their principal by stipulating that they will be entitled to collect the difference between the old mortgage balance and the new, lower balance if home prices recover and the home is sold. This is catching on quickly.

Depending on location, some lenders will work harder at keeping borrowers in home. If the home is in an area where housing markets are free-fall, like Las Vegas, services will try harder to keep borrower in home because of the difficulty that would be faced in selling the property.

If a borrower happens to get a workout, the servicers typically aren't going to negotiate beyond that. Actually getting a workout means that you have been fortunate enough get approvals from mitigation specialists, department managers, and directors to sign off on. The workout your lender provides for you is what you are going to be stuck with, if you are lucky to get one. If you happen to get a workout, be fortunate that you happen to still be in a position to keep your home, after all most lenders hate taking gambles on borrowers and are out to keep their interests first.