I'm surprised though in the case where a homeowner looks like they owe the bank more money that fair market value on the house, that the homeowner wouldn't try to go the bankruptcy route.

People go bankrupt because they take risks beyond their means and I agree we have a cycle of bankruptcies on the way in the near future!

I have found some pretty good sites with comp prices ( compareable rates of homes in the area ), and foreclose, bankruptcy, listings, which I think are pretty good..

Here are the factors:(1) house probably not worth much more than the first note and possibly, part of the second (with interest, penalties, attorney's fees, etc.)(2) house is occupied, not by the owner, but by a "tenant" who has not paid rent for a year; but has put about $50,000 of improvements into the house (he originally had a contract for sale with the owners)(3) wife (house is co-owned with husband she is divorcing) has filed for reinstatement of bankruptcy (her first petition was dismissed) and we won't know until we get to the courthouse if the petition is reinstated(4) there is an IRS lien on the husband which has been filed on the houseFurther facts and questions: (1) will reinstatement of the wife's bankruptcy stop the foreclosure?

If that is true, and and most homeowners are in denial, then why do over 40% of the owners in foreclosure, file for Bankruptcy (Chapter 13 is most common and Chapter 7 is filed on occasion)?

Unless there is a discount offered by lender to a buyer (Short Sale) or the house is an asset protected by Federal Bankruptcy....The homeowner does not need the lenders permission to sell their house.If the house is in the preforeclosure stage, the lender cannot talk to you without written authorization from the HOMEOWNER.

Hell, I've been an independant consultant for 30 years.My point in criticising the MLM "foreclosure help factories' is that in my professional experience (investigating allegations of predatory practices for the Mortgage Bankers Association, Washington DC, and serving as Plaintiff's expert on mortgage loan servicing in several Federal Bankruptcy Courts, plus running my own NonProfit preforeclosure counseling org for a decade) is that the offer to "help" evaporates the instant the so-called services provider realizes there isn't a buck to be made.... leaving the distressed homeowner in worse straights.If you are an exception to the generalization, that's great as you are one less businessman in need of oversight.

The owner filed chapter 7 bankruptcy.

The real horrors will come from civil actions in the local and bankruptcy courts.

How do I overcome the fear of losing it all on my first deal to the point of bankruptcy?