Helping a Homeowner Avoid Foreclosure—What I Learned Along the Way

[David Litt]

I recently had the opportunity to help a family friend navigate a very difficult situation: they were on the brink of foreclosure. They’d fallen behind on payments due to a prolonged medical emergency, and by the time they told anyone, they’d already received a Notice of Default.

As someone with real estate experience, I thought I knew how this would go—either they’d lose the home or we’d try to do a short sale. But what surprised me was how many options were still available, even late in the game.

Here are a few things I learned (or was reminded of) during the process:

✅ Loan Modifications Aren’t a Myth
We helped them apply for a loan modification with their servicer. The paperwork was tedious, but they were approved for a reduced rate and their arrears were added to the end of the loan.

✅ HUD-Approved Housing Counselors Are Gold
We connected with a local nonprofit counselor who helped organize the paperwork and made sure the lender’s requests were met. Completely free and incredibly helpful.

✅ Communication Is Everything
Had they called the lender earlier, more solutions might’ve been on the table. But even with just weeks to spare, we were able to delay the foreclosure and get a plan in place.

The property wasn’t lost. More importantly, my friend and their family got to keep the home they raised their kids in.

I’m sharing this here because I know many of us come across distressed homeowners in the course of investing. Sometimes the best move isn’t to buy—it’s to guide. And you never know whose future you might change.

Would love to hear if anyone else has helped prevent a foreclosure or offered guidance in similar situations.