The Key to Negotiating Out of Foreclosure
The single most important point to understand in this example is that Jerry and Pat constantly communicated with the lender. Communication was the key to their ability to get payments delayed and then get an alternative to foreclosure. Consider that if Jerry had never called the lender, had simply ignored the lender’s calls to him (which, unfortunately, is what most borrowers in default do), the lender would simply have written Jerry and Pat off as a lost cause. It would immediately have started foreclosure and pursued it to the end. In other words, the lender would have seen no alternative but to take the harshest possible course of action. Jerry carefully presented it with a better alternative.
Lenders don’t want to foreclose on homes. Once a lender takes a property back, it becomes a liability instead of an asset. A lender would much rather give the borrower every possible opportunity to hang onto the house or get out from under by selling.
But once the lender began foreclosure, Jerry wasn’t hesitant about taking a tough posture, namely to threaten to “walk” and potentially allow the house to receive thousands of dollars of van dalism.