The options that should not be explored are the ones offered by shysters who are allegedly helping people remain in their homes and “solving” their mortgage problems. This state of the union has bred many opportunists who are simply taking advantage of distressed homeowners only to fill their own pockets. Again, there is no magic bullet.

As far as options, the differences between foreclosures and short sales are probably pretty clear to most at this point. Contact us if you need guidance in those areas.

Some of the other alternatives for distressed homeowners include:

• Refinance
  • If you are current with your mortgage payments you may be eligible to capitalize on the current interest rates.
• Lender Workout
  • You don’t know until you ask…some lenders are making things work by forgiving back payments, adjusting interest rates, and even recasting existing loans.
• Sell and Bring Cash to Closing
  • You can avoid foreclosure by making up the difference to the bank if you sell your home for less than it is worth, but still make good on the debt. Some homeowners are reaching into IRAs and the like to liquidate assets for this purpose.
• Deed in Lieu of Foreclosure
  • This is not a viable option in all markets, but you may be able to literally trade in your home in exchange for the cancellation of the debt. In this scenario be certain to ask the bank to release the deficiency so you are free and clear.

Each of these options may have potential issues and may carry eligibility restrictions. Your first steps are to take full stock of your situation and then contact both an experienced distressed property Realtor and your lender. The thing not to do is wait…if you are a homeowner in trouble; time is not going to cure what ails you.

These shadow inventory properties are currently in foreclosure or are headed that way and are just not yet on the market. So while the government’s efforts to decrease foreclosures have backfired, the foreclosure purchase opportunities will be rampant for investors.

The National Association of Realtors has reported that there are currently 3.6 million homes that are unsold; we are now looking at twice the current inventory that will be available to investors and even to homebuyers looking for foreclosure opportunities.

In addition, since the governmental modification programs and refinance programs didn’t avail themselves to homeowners who were either too wealthy or owned too much on their homes; a very large percentage of the shadow inventory homes are luxury class. Many of these homeowners have given up and have vacated their homes.

These are the hot real estate investment opportunities: the chance to buy a high-end investment property by offering a home owner a short sale proposal. And while we need to reiterate that short sales have to be processed through experienced short sales Realtors, these are the veritable spoils of war that make for brilliant real estate investments.