Let us look at each of the owner’s goals in turn and see how you can meet them.
• Avoiding the stigma of foreclosure can easily be accomplished through a preforeclosure purchase.
• Getting the lender off the owner’s back can happen in one of two ways. If your state is a nondeficiency judgment state, this happens automatically. If not, you can negotiate for the lender to forgive any remaining balance on the debt. The lender will never see that money anyway. For the time being, the borrower will probably be judgment-proof. The lender will sell the deficiency claim to someone else for a penny or two on the dollar. The lender would much rather give up that claim if it will help him or her sell the property to a qualified buyer. See Chapter 8 for additional details on this issue.
• To help the owner have a little money in his or her pocket, buyers in states with postforeclosure rights of redemption can offer to purchase those rights from the borrower. This speeds up the ability to sell the property. You can defer payment until you actually flip the property, or until you place permanent financing on it if you plan to be a landlord or a homeowner. In all states, you can offer to make the former owner a silent partner who will share a small percentage of your profits, comparable to what you would pay a scout.
• The former owner can retain his or her standard of living if you are willing and able to rent to him or her. His or her life can continue as if he or she never faced foreclosure; he or she does not have to move, the neighbors do not gossip, and the children do not have to change schools. These are all huge motivators.