Foreclosures have been getting so much bad publicity in the press lately that to say they are a good thing and produce a win-win scenario for real estate investors, lenders and even homeowners is to fly in the face of reason but let’s examine things for a moment through a scenario that actually happened to me.

I once bought a house for just $3,000. The couple who owned it had to move due to work commitments. House prices in their area had shifted little since they had bought the house and they were ready to default on their mortgage and allow the home they owned go to foreclosure rather than wait months and months to sell the house and then struggle to get the asking price which, at any rate, would have left them little room to manoeuvre in terms of relocation costs.

I stepped in, arranged to take over their mortgage payments, gave them relocation money and found a buyer who wanted to step in and pay the asking price because of family pressures. I made some money so I was happy. The couple received more from me than they would had they tried to sell the house themselves and move, so they were happy. The lender had got their money back and had not lost anything. So they were happy. This was a foreclosure that produced a win-win scenario all the way and it was only made possible because of the way our economy is structured and the real estate model in a free market works.

Of course there are scenarios where the homeowners have to move for far more serious reasons. Maybe they really are in trouble with money or maybe there is a death in the family and they can no longer make payments. But even in those cases a true real estate investor delivers a win-win scenario. Homeowners, many times, fail to find any solution to their money problems and get caught in a downward spiral with the only outcome the loss of their home and the irreparable damage of their credit history. A real estate investor is an expert who supplies solutions that can work.

Through the process of foreclosure (or even before it) a real estate investor can take over a property, allow the trapped homeowner the ability to move on without the burden of the house any more and can then work to get the property back in the market where it can start delivering value for all concerned.

Foreclosures can deliver a win-win scenario almost every time provided the foreclosure is a real result of the way our economic model works rather than a case of misrepresentation or misselling or predatory lending by a mortgage lender. In that case the equation is imbalanced (or stacked if you like) to favour the mortgage lender and potentially unfair to the homeowner and that is never a good thing.