Can you explain to a distressed homeowner what their options are before they get to a point of receiving the notice of foreclosure sale? 

It seems not an evening goes by nowadays without a TV interview showing an anxious homeowner sharing the confusion they experienced about the mortgage rate and terms at the time they bought the house that's now upside-down. Three to five years later, when the rates have adjusted, higher mortgage payments have become a reality and the specter of foreclosure looms on the horizon,  it's not a stretch to imagine many distressed homeowners similarly confused about their options.

Banks don't like it either. After the axe falls, it's not surprising to hear how some homeowners have lashed out by "installing" new vent holes in the walls of their former home, expressing hastily painted "abstract art" on interior surfaces or unceremoniously flushing "cement cocktails" through the plumbing.  Most lenders would rather work it out before it gets to a foreclosure sale.

Sadly, some former homeowners admit having "waited too long" before trying to do anything about it.  Even more tragic is to hear testimonials where the delay was attributed, at least in part, to not knowing what their options were when they first started missing payments. 

When a problem arises, some of us try the "work harder" approach.  In a preforeclosure scenario, that may mean trying to bag a second job.  Sometimes that works, but when it doesn't and the Notice of Default comes in the mail, it's not unheard of for people to burn more precious time trying to figure out who to call next.  Here's a biggie that comes from a place of fear, uncertainty and doubt:  "How much time do I have before the sheriff shows up on my doorstep to evict me?"

Agents can help be a procedural guide and place proper context to fears.  While we may not typically be the first point of contact (most homeowners will likely first call a bankruptcy attorney, CPA, tax attorney, the bank, etc.) we can be prepared to discuss options in the preforeclosure stage when the question comes up.  These questions won't necessarily always come from distressed homeowners themselves.  Sometimes the question comes from someone who has a neighbor, a family member or friend that's in trouble.  

Many educational programs are available to help us.  These include textbooks, eBooks, CDs and classroom courses.  They've also begun to materialize online in the form of websites, audio podcasts, and web-video seminars.  (Shameless plug: I recently had the pleasure of working with Jacob Swodeck and RealtyU to bring Jacob's short sale bootcamp seminar online in the form of the Certified Short Sale Professional course.  [Demo below.]) 

In any case, whichever program you use to acquire the knowledge, it's important to do so if, for nothing else, than to fulfill our professional obligations to be a ready resource in helping homeowners navigate confusion and properly frame their fears.