What to say to a homeowner in default?

[Alex Rivas]

I'm looking for leads to wholesale in the list of notice of default, but before I knock on someone's door I just want to ask what should I say to them without offending them?

[Bill Gulley]

Originally posted by @Alex Rivas:

I'm looking for leads to wholesale in the list of notice of default, but before I knock on someone's door I just want to ask what should I say to them without offending them?

I'm going to give you some very sound advice here, you won't like it perhaps, but you'd do very well to head this advice.

There are new federal laws concerning "helping" homeowners who have received notices of default. The law carries heavy fines and constitutes felony charges that can include jail time.

David's comments imply you take an approach to "help", that would be a big mistake. Unless you hold a credit counselor's license or you are an attorney or a registered lender in some cases, you should never approach the deal as you are "helping" them getting out of or avoiding foreclosure. Don't even use the words "help you"!!!!

Approach them as you would anyone else, you never need to bring up the word "foreclosure", that owner already knows what position they are in, you sure don't need to remind them!

Ask if they would be interested in selling the place, just as you would anyone else! Treat them like anyone else.

There are serious issues getting involved in wholesaling pre-foreclosures, while these owners and properties look like they are ripe for the taking, you are in dangerous waters and you have no idea how things can go wrong.

There is a thread about these issues, if you're interested you can search the wholesaling threads.

It's much better if you not go there, but if you know someone is in foreclosure you'll be better off carrying on as if you didn't know. You really are not trying to get a contract to save the world, you're doing it to make money, carrying on like you are the savior of their problem is predatory thinking, a predatory approach, you're preying on those in trouble to profit from them, so let's not make it as if wholesalers are knights in shinning armor. If you never mention the foreclosure then you never enter this aspect of acting in a predatory manner.

I think we have 5 attorneys here on BP, they are qualified to "help" these owners. To my knowledge there are no licensed credit counselors. If a lender is involved with that borrower, they can contact borrowers. To my knowledge that means, other than our attorneys, no one on BP is qualified legally to assist anyone in foreclosure! Making any claim that you are going to assist an owner in avoiding a foreclosure is a felony, pure and simple!

With my background, experience and knowledge, I would not wholesale a property that was in foreclosure as wholesalers do, finding a deal, going out and finding a buyer, assigning a contract and having the closing. That is how dangerous this matter can be. I had an opportunity to do one last year, I contacted a Realtor and told the owner to take the listed route, the property sold and the FC was avoided, if you want to help someone, that is what you do! :)