I receive an extraordinary number of phone calls and emails from people that want to learn how to save their homes or save their credit. Why am I getting all of the phone calls? What do I ask the callers and can I really do anything to help them?

The Market

According to the Daily Real Estate News, 12/14/2006, there will be a huge wave of new foreclosures - "Almost 14 percent of sub-prime borrowers with ARMs (Adjustable Rate Mortgages) were behind on their payments last quarter, the highest rate since the start of 2003."

Some areas of the country such as Ohio, Indiana, and Michigan are being particularly hit hard with a shifting job base and overall lack of growth combined with high taxes, harsh winters, and predatory lending. As many as 2.2 million people are facing foreclosure and could lose their homes estimates the Center for Responsible Lending.

There is a huge demand to solve the problem, so what can be done?

Finding Sellers

If you listen to late night TV gurus, many advocate driving around neighborhoods looking for signs of deferred maintenance which can often be a sign of someone in the pre-foreclosure stage. Old newspapers piled on the front porch, frost on the inside of house windows (indicating that there is no heat in the home), unshovelled sidewalks (cold climates), all may be signs of abandoned houses or signs of home owners under pressure.

While this is certainly one way to find foreclosures, I prefer foreclosures to "find me".

Using a series of advertisements, I have become known as someone who can help people in foreclosure. First, I run advertisements in two newspapers - one daily newspaper and one "free" paper which runs weekly. Next, I run small television ads on our local cable station in the section where people advertise for
used household goods, cars, etc. Finally, I use signs and a web site to prompt people to call my cell phone.

I typically use the 24" x 18" signs that say, "I Buy Houses" and "I Take Over Payments" both of which include my telephone number. These signs are placed on my own properties and yield a significant number of leads per month.

My web site, http://www.americanhousingproviders.com offers advice to people that are going into foreclosure and rental properties I have available should the foreclosure process go to completion. I have a form that people can fill out which is automatically forwarded to me via email.

However, most people respond to my ads by simply calling me on the phone. Depending upon the ad that they see, they will call my office phone or my cell phone. The reason for the difference is that I feel I can give people more attention if they call my cell phone. It also allows me to know instantly which ad is working.

What do you say to them?

The first thing I try to establish is if they want to keep their home. The answer to that question will determine how I proceed in the conversation. If they want to keep their home, I will go through a series of questions regarding how far behind they are, where the property is located, what the property is like (bedrooms, baths, condition, age, etc.), their personal finances and what they are hoping I can do for them.

Key question - Would you sell your home for what you owe on it?

At this stage of the dialog, I am attempting to understand their situation. If they wish to keep their home, I will ask them "Have you tried to borrow money from family and friends?"

Amazingly, some people would rather lose their home than ask other family members, even their parents, for money. A false sense of personal pride blocks them from solving their own problems. When I perceive this type of attitude and it appears that with a little help from their family or friends they can actually save their home, I'll ask some very tough questions that put them on the spot.

"Do you think your father or mother would rather have you lose your home or do you think that they would prefer you to ask them for help?" Even if a parent can't come up with the full amount owed, combined with other funds either parent or siblings can contribute to a fund to help the home owner get caught up.

Again, the central question is, "Do you want to try to keep your home?"

Next, assuming they want to remain in their home, I ask them if they have anything that they can sell to raise the money. Very often, the home owner has no assets, but in some cases there are gun collections, antique furniture, collector cars, etc. Amazingly, some home owners facing foreclosure are unwilling to sell their "stuff" even though they might be able to save their home.

My next question is, "Do you realize you can sell your home up until the judge takes it away AFTER the auction?" I will ask them what things they have done to market their home. Often, depending upon the stage of the foreclosure, the bank may work with the home owner to forestall the process if the home owner is willing to put the home on the market with a real estate agent.

After we have gone through all of the different possibilities and the situation looks hopeless, we discuss the possibility of a short sale where the bank agrees to satisfy the mortgage for less money than what is owed on the mortgage.

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