How to Approach People in Foreclosure

At the Door, knock but don’t pound or ring. I like knocking on something they’ll hear; it may be something other than the door.

When they answer, always act as if the (adult) person answering the door is the defaulting homeowner. Your goal is to get them talking, and you listening.

• In a presumptive tone, say: “Mr. Jones, my name is _________. I’m a specialist in distressed property situations, especially foreclosures.”
• “I realize that at this late date your foreclosure problem is probably taken care of.”
• “However, I wanted to stop by and make your acquaintance and let you know that if anything, and I mean ANYTHING, occurs that results in you getting less than what you were originally promised, don’t feel that it’s too late to do something about it.”
• “Are you happy with the deal you’ve worked out? I mean, is it what you want?” If they have a deal, ask to see it. Maybe you can offer something better.
• Ask, “How’d you get in this situation?”

Be patient with the answer-don’t interrupt. Listen to hear their perception of the predicament and if THEY believe it to be solvable.

• Then say, “So, what are your plans now?” Listen (but don’t ask) for either key answer, i.e., Do they intend to stay no matter what, or are they thinking about moving? [Determine if they are potential sellers or borrowers at this point].
• If they talk about staying, will a loan fix the problem? Determine if they can they afford to stay by asking, “How much do you current monthly mortgage payments add up to? What about the taxes and insurance?”
• “How much money does the family bring home every month right now?” This answer is important. If the take home pay is anything less than about double the combined mortgage and related expenses, they can’t afford to stay.
• But let them see this by only saying, “I think I see the problem here. A loan is only going to trade problems, right?”
• If a loan won’t work, discuss how you can help them salvage something from this situation and show them how to keep from losing everything they own. Also, discuss how you can save their credit (an NOD will drop off their credit in a few years. An eviction will prevent them from renting anything except from the worst slum landlords… it’s a fact!)

Once you’ve established what the opportunity is, immediately call in your expert (closer) to negotiate an agreement on-the-spot and do the paperwork.