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As we bring in 2009, it is also time to welcome a few new regions to the Default Research coverage area.  Actually, we are welcoming back the Chicago land area and rolling out the red carpet for Portland, OR.  As the third largest metro area in the nation, Chicago provides ample opportunities to make great deals for our savvy clients in the Windy City.  Portland will also be very attractive to our clients because it has seen steady growth even during the foreclosure crisis, is still affordable, and is one of the best kept secrets in the West.

We are going to be exploring other new frontiers in 2009.  Our market research website is getting a makeover that will allow it to be more user friendly for anybody looking to make more informed investment decisions.  From Alameda to the zig-zagging beaches of Florida, our clients will have the ability to research foreclosure trends in our coverage area by county.

Now it is time for our clients to blaze new trails in the New Year too!  In this edition, we will again tell you the best ways to get your business started, how to avoid major pitfalls, and even where the hot spots are in the country.  If you run with this important information, your competitors will be chasing you from home to home as you seal deal after deal in 2009.

Good luck this year – I know that, together, we can make it a great one!

What to do if you are Facing Foreclosure?

With the media using the word foreclosure day after day, it is easy for people to become desensitized to the deep impact a foreclosure can have on a person's life. But, the worst possible thing a homeowner can do is ignore the situation because this will make the problem much worse and leave fewer options. While a foreclosure can be very difficult on homeowners, this burden can be diminished by accepting the situation and searching for solutions early.

From my experience as the founder of Default Research, I can't stress this enough - get started early! We have seen so many foreclosure stories end well when families who are 30 days overdue begin to assess their financial situation and find solutions to their growing problem. In my opinion, the best method to determine if a family can afford to stay in their home is to calculate their loan payments using the prime interest rate. If this payment is still too high, then the family has one option - to get out of the home. The family should consider listing their home with a realtor immediately who could advise them on a price that will allow the home to sell quickly. Another option is to consider selling the home to a real estate investor which will help the seller avoid paying the six or seven percent commission to the broker. Finally, a seller can always look in the newspaper classifieds for people interested in buying homes.

If the person in trouble believes they are just in a short term income "slump" or can afford payments at a lower interest rate, then they will most likely be able to remain in their home. Once they make that determination, their first job is to examine their monthly income and expenses. Then they need to call a lender and ask for their loss-mitigation department. The owner must honestly inform the lender of their situation and the lender should be willing to negotiate by waving penalties, renegotiating rates, etc.

Worst case scenario is when an owner owes more on their home than it is worth. This is known as being upside down on your mortgage. This is where the short sale comes into play. Essentially, the owner will negotiate with the lender to sell the home for less than the loan balance. There are various ways of handling this. Contact the bank directly and tell them that this is what you are interested in doing, work with a realtor who specializes in short sales, or work with a reputable company that specializes in short sales.

Those are all possible solutions to the growing foreclosure problem in our country. Here are some unfortunate trends we have seen with homeowners in foreclosure.

(1) Statistically, over 50 percent of homeowners in foreclosure are either in denial or ignore that fact that their home is in foreclosure. This is a major problem because, if the homeowner does not accept that fact that their home is being foreclosed upon, there is no way to help them. The faster a homeowner can accept the idea that they are facing foreclosure, the more options are available to them. Waiting a week before the auction and then trying to cure the foreclosure leaves you with very few, if any, options.

(2) We have found that approximately 20 percent of homeowners just pack up and leave their homes. This option is not a good one either. By doing this, you may be missing out on the equity that has been built up in your home, face a foreclosure on your credit report, and opening up the possibility of the lender suing you for the balance of the loan (deficiency.)

(3) Some homeowners have purchased homes that they just couldn't afford. In these cases, the homeowners must accept the unfortunate fact that they will not be able to remain in their property. This is a hard pill for some to swallow, but the fact is that if you can't afford to make the monthly payments along with the taxes at the prime interest rate, you can't afford to remain in the home.

Picking A Region To Work In

The two most common questions we get at Default Research are which area is the best for loss mitigation and which markets are the least competitive? Since we do not engage in any loss mitigation work, that is a difficult question for us to answer. We find that everyone immediately flocks to the areas that have the most foreclosures, and that may or may not be a wise choice. Because everyone is interested in the same areas, these areas become more competitive.

On the other hand, those clients who branch out into less foreclosure-populated areas like Northern California, Washington State, or Suburban Detroit find that there are more opportunities in these lesser known areas. These "low key" areas tend to have less competition, so we encourage people to get out and explore!

Finally, wherever you are, know your foreclosure laws.

Obtaining Discounts Via Direct Mail

Direct mail is one of the most powerful methods of advertising. It can also be very expensive, but with a few pointers you can significantly reduce costs. Here are a few:

1. Make sure your list is correct and accurate. One of the advantages of Default Research is that we verify homeowner addresses through the NCOA (National Change of Address Database), and this ensures that nearly all of the mail our clients send reaches the intended recipient. Those using unverified lists will find that they are getting 20 percent or more of their mail returned as undeliverable
2. Sort your mail. If you sort your mail by zip codes you will be able to earn a discount on postage.
3. Pick the right day of the week. Experiment by sending mail out on different days of the week. Sometimes mail arriving on the weekend has better results than on the weekday. Conversely, some of our clients have found that mailers sent out on Monday or Tuesday work best. You have to experiment for your area's best results.
4. Track your items. Use unique phone numbers or special offer codes to track which marketing campaign works best for you. These are a few pointers to improve your direct mail campaign. You can also visit the United States Postal Service site which has even more information at www.usps.com.

"Imagine Being Able to Consistently Get Seller's To Sell At A 20% to 50% Discount!"

As a realtor, your job is to find your clients the best property for the best price. Thousands of realtors are using the Default Research foreclosure lists to locate highly motivated sellers in financial distress for their clients. Default Research customers have the distinct advantage of targeting short sale leads by receiving our foreclosure lists two to three weeks ahead of the competition. The extensive lists not only arrive before other companies, our clients can easily search, organize, and utilize their customized lists of preforeclosure and foreclosure sales to suit their needs. With our lists, realtors have access to:

1. Most up-to date information
2. Verified phone numbers
3. Verified mailing address
4. Daily e-mails with listing
5. 14 different search criteria
6. LTV and market value
7. Comparable property reports

Additionally, by being the first to approach the homeowner in distress, a realtor can obtain new listings and expand their personal market. Many homeowners in foreclosure are searching for a realtor who can offer options and find potential buyers for their property. By using pre foreclosure listings, realtors have ample opportunity to list the homeowner's property and sell it before the property enters full foreclosure proceedings. Our savvy clients know that often auctions do not take place for nine months from the day the first foreclosure document is recorded.