The lure of making money by investing in foreclosure properties
has too many times led to real estate professionals taking advantage of
homeowners facing the loss of their homes. Their focus on reaping huge
profits from these properties causes them to lose sight of the moral and
ethical side of doing business and providing a helpful solution to
assist foreclosure victims. In response to these practices, some states
have begun regulating how investors and foreclosure help companies do
business in certain situations, including profit-capping measures for
investors and fuller disclosure requirements in the area of loss
mitigation. In addition, courts have ruled that, in some cases, the
popular rent-back or leaseback option counts as a loan to the former
foreclosure victims, rather than a rental agreement, forcing the
investor to foreclose on the property again if the renters fail to pay
as agreed.

While these laws provide further regulations that
reputable foreclosure experts must now follow, the foreclosure scam
companies will continue to do whatever they can to take advantage of
homeowners in foreclosure. Many of the worst of these companies do not
even bother to research the relevant foreclosure laws and rely on
homeowners to fail to gather their own foreclosure information. In
essence, they rely on their own ignorance of the law and the foreclosure
victims’ ignorance in order to prey upon homeowners. This presents a
unique opportunity for legitimate foreclosure investors and companies to
fill this void by educating foreclosure victims on what can be done to
stop foreclosure legally and effectively.

The vast majority of
homeowners in foreclosure would like to keep their home if a suitable
solution was presented. The idea of being set out on the street with
nowhere to live and no opportunities to improve the lives of their own
children causes great anxiety and scares homeowners to the point of
trusting a scam to take care of their problems for them. Investors who
are able to educate homeowners and structure a deal that is in the best
interests of all involved are able to provide these homeowners with
local solutions to stop foreclosure that will give them the best
opportunity to repair their financial lives and get out of debt.
Obviously, this deal will have to be a win-win situation for both the
investor and foreclosure victims, but any win-lose or lose-lose
situation will not provide either party with a long-term solution to the
problem. Being honest with homeowners in foreclosure about their
options and educating them on what will happen before, during, and after
the foreclosure process is often the most effective way to come to a
mutual understanding of the benefits of any plan to save a home.

There are many possible solutions to help homeowners
save their homes from foreclosure, including ownership partnerships,
trust agreements, and land contracts, to name just a few. Structured
correctly and reviewed by all parties and their legal counsels, these
can be very successful in putting an end to the foreclosure process. The
most commonly used solutions are rental agreements and leaseback
options, which give homeowners the possibility of living in the property
and making rent payments until they have significantly improved their
credit and can qualify to purchase the home back. Sometimes, these
options will result in lower payments for the homeowners, as investors
can often qualify for lower interest rates and pass those savings along
to the foreclosure victims, which provides them with the best chance of
eliminating debt and starting a savings plan.

By carefully
considering a legal and mutually beneficial method to stop foreclosure,
both homeowners and investors can provide each other with important
benefits. Investors will be able to acquire a new investment property,
improve their own credit scores, and make income from helping the
foreclosure victims. Homeowners, in turn, will be able to avoid
foreclosure without the loss of their homes, be able to remain living in
their house, have an opportunity to repair their credit, and eventually
repurchase the property, completing the process of financial recovery.
In addition, educating homeowners on how foreclosure works and what
causes it will allow communities to learn how to prevent future
foreclosures and build a knowledgeable local population on guard against
various foreclosure scams, who will not rely on the government to
protect homeowners in financial hardships.