I think the biggest problem with foreclosures is the the borrower thinks as soon as they get behind that it's to late. That is in fact far from the truth. There's probably several Astoria area homes for sale right now for the simple fact the owner is getting behind on payments or is behind. In my experience as a Real Estate Professional, most borrowers get into a pickle and just give up. This has led to Loss Mitigation Consultants becoming more and more popular. You see, the Lender still looses after a foreclosure is complete and the property re-sold. First, it takes several months after the borrower is in default for the bank or asset manager to get legal possession and ability to sell the property. While this is going on, the lender has to maintain the property to protect their interest. Of course the lender incurs additional fees in the sale, and an additional fee to the asset manager for coordinating the whole event.

Instead of going down the path towards ugly foreclosure, it's advantageous to everyone to work out a compromise. The bank wants monthly payments made to them, not to own Real Estate. And the borrower gets to keep their home and any equity in it. Six lenders including Bank of America, Citigroup, Countrywide Financial, Chase, WaMu, Well Fargo have extended an olive branch to delinquent borrowers. Instead of giving up once they fall behind in making their monthly payments, these lenders are offering terms to modify the original loan terms to keep the borrower in the house and the lender from having to foreclose. It's the best possible outcome in this situation.