Agents who have experienced easy accessibility with these common characters will confirm their differing motivational expressions over those who face losing it all. These ‘stressed’, but not ‘distressed’ property owners represent over 10% of the market inventory in most metropolitan areas. The personal experience I have gained in consulting in strategic situations is that these owners for the most part do not care to save the property unless they can settle the matter with an unreasonable amount of principal reduction on the mortgage.
Understanding the psychological pattern that occurs with the steps that lead most people behind can help us counsel these prospects. Most people will place financial stress on their menus with the overuse of credit or draining their savings before considering a mortgage default. As these resources dwindle, the home becomes a matter outside of just the heart. The Strategic Defaulter will not commonly fit this pattern and for the most part, may not even qualify for lenience in most Short Sale underwriting scenarios.
When residential borrowers present themselves in a compare to like fashion as Investors would in the commercial playing field, Agents may serve them better by referring these Strategic shakers to a mitigation attorney or specialist in modification. Chances are, the psychologies may be a better match as these defaulters would rather settle these issues long before the mortgage gets too far behind as the protection of their credit is usually more at issue than the defaults inspired by achieving victim status.
Mitigation Attorneys have legal tools and resources that are completely off limits to other practitioners in any other category including real estate licensees. The survey results from cases I have followed up are astonishing as some distressed borrowers found relief in resets and principal reduction that would shatter ones thinking, especially if you were a Distressed Seller that signed a sizable promissory note to close a Short Sale in the traditional model.
While I have also expressed in Seminars and other articles that some of the Mitigation firms out there may not favor the interests of most, I find exceptions that I even wish were regularly possible for the majority. What my goal is in the educational setting for Realtors is that they determine the motivations of the players in the projects they take on, identify when it is that they may be more motivated than the prospect and leverage their time by referring them immediately and finding the golden gooses out there that can be helped by straight shooting.
Ultimately, the manner by which the current real estate recession works itself out against the constraints of other financial corrections needed for overall recovery. Each of us concerned are admonished to be both knowledgeable and professional in our estimation of where individual situations have their merit and our ever present openness and focus to how we may assist other without discrimination or self serving motivation.
Copyright © 2010 Bryan Ridgley
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