Essentially, loss mitigation involves bringing in a third party to negotiate a repayment plan so as to avoid a foreclosure from occurring. Now, this is not to say that loss mitigation will free a person from their debts or that the lending agent will be completely agreeable during the mitigation, but it does provide at least a possible way out of a foreclosure and that can save the lender and the borrower a great many headaches. Therein lies the key to understanding why a lender may be willing to work out a deal with the person who might be foreclosed upon: there are so many costs associated with foreclosing on a property (legal, marketing, etc) that the costs of foreclosure may exceed whatever “losses” they may absorb in mitigation. As such, loss mitigation can remain a viable option under certain circumstances.