A Guide to Assist Foreclosure Homeowners As a Foreclosure Investor Based on the information you collected for deal analysis, you should be pretty clear which options are available to the homeowners. You can start to assist foreclosure homeowners to work on their bad loans. Based on the homeowners' situation and resources, you should offer different kinds of assistance according to your goal. Homeowners who have substantial equity built up in their property Homeowners who have substantial equity built up in their property tend to have more options. Most people want to keep their homes. You should assist homeowners to negotiate with the lender for a forbearance and provide a payment schedule that's suitable for the homeowners. In the case that the homeowners can't afford the mortgage payment, they might have to sell the property to repay the loan. The key here is to make sure the homeowners have sufficient time to list the property. If they are short of time, they may lose the equity they have built up in it. Instead of selling the house, some homeowners would consider refinancing. When there are lots of houses being foreclosure, interest rates are usually low. Most people think it is easy to work out the bad loan by refinancing. Homeowners can pay off all their debt with a new mortgage that has lower total monthly payment, however, that's not necessarily true for foreclosure homeowners. In most cases, foreclosure homeowners' credit rating may have been downgraded because of the delay of several mortgage payments or other problematic loans. It is common that homeowners end up with a loan that has higher interest rate. Refinancing is tricky, as a foreclosure advisor, make sure you understand the homeowners 'needs and estimate situation properly. Homeowners who have insufficient equity built up in a property When homeowners have insufficient equity built up in a property, the only option they have is to sell the property under market value and repay the debt. Homeowners may be reluctant to short sell their home, but for foreclosure investors, short selling is the most profitable business if you can negotiate a short sell with the lenders and the homeowners. Mostly, lenders would like to work out a bad debt as soon as possible, and accept less than full payment. Homeowners would be happy to get paid a little extra for the house and move on with their lives. You can make the deal even more profitable by renting or selling the house back to the homeowners. The bottom line is that you will only do that when the homeowners have sufficient income to pay rent after you buy it.