The amount of equity found in the property will affect the judges decision to grant relief from the stay. If there is significant value in the property being foreclosed, the judge will not grant relief from the automatic stay. The hope is that some of that equity can be used to satisfy other creditors. If there is very little equity in the property, the judge will probably grant a relief from the automatic stay and allow the foreclosing lender to proceed.

Cram Down or Short Sale Lenders are most fearful of the courts authority to impose a cram down or short sale provision. The court can move to modify the terms of the mortgage or trust deed. This could include modifying the payment schedule to help the debtor, or actually reducing the principal amount owed on the mortgage note. The cram down provision can only be used with reorganization types of bankruptcies (Chapters 11 and 13), where the property plays a key role in the reorganization plan.

Debtors have come up with some pretty creative ways to stall foreclosures. Maybe you thought that a person can only file a bankruptcy once every seven years. That is true of Chapter 7 liquidations but not true with Chapters 11 and 13 reorganizations.

The law does not prohibit the act of filing bankruptcy, and it is the filing that brings on the automatic stay. Because of this, a growing number of debtors are using that loophole to further delay the foreclosure process. Many judges are now wise to this trickery and will quickly lift the new stay.

Bankruptcies Filed after a Foreclosure Sale There have been cases reported in which a bankruptcy judge has overturned a foreclosure sale that occurred just prior to the filing of the bankruptcy petition. The judge may rule that the equity in the property could have been used to pay more creditors.

Because the Bankruptcy Code is a federal law, a debtor in any state can file a bankruptcy petition and stop the foreclosure process. If the bankruptcy petition is filed 15 days into the foreclosure, the foreclosure will resume on the 15th day after the automatic stay is lifted. In other words, the lender does not have to go back to the beginning of the foreclosure. They resume the foreclosure from where it already is.

Renegotiate with the Lender The most overlooked of all the foreclosure options an owner has is the opportunity to renegotiate with the

lender. The lender does not want the property back, and any effort by the owner to negotiate a plan that will enable the loan to be back in service for the lenders loan portfolio will be looked upon with great favor by the lender.

Generally, the current months payment plus a portion of the past-due amount will be considered. In Texas and all other states, the borrower can renegotiate with the lender right up to the foreclosure sale.

Sell the Property For the owners who dont care to save their property, or who have no other choice but to let the property go, selling the property may be the smartest choice.This is true even if they have to sell the property at a bargain price.

This is better for the owners than losing their entire equity and damaging their credit at the same time. Your purpose with the foreclosure options presentation is to have them come to the conclusion that selling you their property is their best and most profitable foreclosure option. Owners can try to sell their property right up to the foreclosure sale in Texas and elsewhere throughout the country.

Do Nothing The owners always have the choice of just letting things happen. They will surely lose their hard-earned equity and damage their credit. They can just about forget getting a new home anytime in the foreseeable future.

Unfortunately, we have encountered more than a few people who just put their heads in the sand. They think they are going to win the lottery. They procrastinate until there are no viable options left to prevent the foreclosure sale.

Part of your job as a real estate investor is to motivate the property owner to take action that will benefit the property owner. Doing nothing is a form of action that in this situation has only negative results.

In the next chapter we will show you how to buy the owners equity. Buying the owners equity may be different than buying the owners property. As part of our Quick Cash strategy, you may want to flip the owners equity to another real estate investor for a fee.

Negotiating with owners becomes more than just buying their equity. You also have to figure out to whom you are going to flip that equity.That person is the source of your Quick Cash. Without a buyer for your good deal, your good deal can turn out not so good.