What Works In A Workout Negotiation? A Classic Win-Win Approach And A Third Party Expert Representing The Borrower.
Many potential clients try to do it themselves. Why not save a bundle on fees and really, the truth is the truth, isn’t it? They think, “I cannot afford to pay, what more is there to know?”
There is much more.
If only “the truth” were the issue, but it’s not. There is more—much more—to the situation and frankly, a borrower will typically say anything he feels will work to gain an advantage. The borrower usually argues the wrong argument, telling the bank he cannot pay and thus needs a workout or debt forgiveness, not really understanding what motivates the bank’s decisions and definitely having zero credibility. After all, it was him, the borrower, who defaulted and who now wants a deal. This leaves a very sour taste in the mouths of many workout bankers and does not gain their best cooperation. Everything the borrower says is highly suspect and unlikely to be helpful to the bank’s position.
We, as a third party expert, understand the bank’s needs completely and fashion our workout strategies to provide a win-win solution, playing to the bank’s benefits, not the borrower’s. The fact that it works out well for our borrowers in default is not the issue or focus of the bank at all. What benefits them is the bank’s focus and one has to know, understand and deliver these benefits or the negotiation is unlikely to succeed. The classic “win-win” is critical for success. That is why we are so successful at delivering the results we do, because we deliver a win to the bank.
Frequently, the worse the relationship is between the banker and the defaulting borrower, the easier it is for us to negotiate a settlement with the bank as we have a new opportunity to create a meaningful relationship along the lines of what’s in the best interest of the bank. The fact that this may also be what’s in the best interest of the borrower is irrelevant to the banker and only relevant, or even visible, to us. But that’s our secret.
Both borrower and bank can win, as long as the bank believes it is getting what it wants and needs. Few defaulting borrowers can execute this type of strategy successfully; let the pros do it. We have a client who offered $450,000 to the bank on a $950,000 loan only to be refused, yet, when we offered $50,000… it was accepted. ‘Nuff said.
Call us at 413-584-2581. Norm will arrange a no-obligation teleconference for us to evaluate your situation and discuss the strategies that will be best for you.