Many homeowners are not only finding that they are underwater on their mortgages – meaning they owe more on their mortgages than their homes are actually worth on the marketplace. They are also finding that because of a job loss, a pay cut, or medical tragedy that they are unable to afford to keep up with the payments.

People in the position of not being able to pay their mortgage on time should reach someone who can help them stave off delinquency, or, in worse cases, secure a line of credit that will allow them to round off foreclosure until the borrower’s liquidity improves or the home’s price rebounds, adding equity.

By enlisting the help of a loan lawyer, specifically, borrowers can have leverage in negotiating with their lending institutions, who want to save themselves the legal disbursement of foreclosure proceedings. Besides helping to negotiate short sales, a lawyer may also be able to serve in securing foreclosure loan modification on behalf of a borrower.

But attorneys aren’t always able to save homes or credit for their clients. In cases such as those, banks will foreclose on houses that they will then auction quickly so as not to hold costly inventory on their books that can be otherwise monetized. Savvy investors are smart to try to secure a foreclosure loan for the purchase of a foreclosed holding. Properties bought at auction are often priced so far below market value that they can be ‘flipped’ just weeks later, even in a soft marketplace, for a profit, after buyers have put just 10% of the value down – a recipe for very high returns on investment. Otherwise, buyers find security in rental income that many foreclosed properties can generate – sometimes with the former owners renting back their former homes.