There are (3) three phases have been established for classifying distress clients and help in determining the “mind set” of the client and appropriate actions to take. These are:
- Uncertainty Phase
- Alert Phase
- Distress Phase
The phases are based on the level of concern clients may be in danger of foreclosure. Each phase requires the collection of information that can assist in determining the proper response action.
The phase types change as information in gathered and the situation develops. If sufficient information is researched in early reports, one or more phases may be skipped in determining the proper phase for a particular client.
An uncertainty phase exists when the home owner has knowledge of their distress situation and understands that it needs to be monitored but they do not think they need to act.
Example: If the client is in debt, it could be right before the lis pendens (intent to foreclose) is filed or right after. In a bad marriage situation, the divorce may not be final yet but they are aware they are going to have to sell their home.
Exterior inspection: Still shows some semblance of the pride of ownership. Home is occupied, keeps lawn maintained and life seems normal.
An alert phase is assigned when a client knows they are having difficulty and needs assistance, but are not in immediate need of a sale. Home owners are usually collecting information and considering and exit strategy. Timelines become more important.
Example: In a debt situation, usually 6+ months after lis pendens has been filed. Client may have a defense attorney. In dissolution, client may have a job offer and an immediate start date and needs to quickly sell the house and move the family.
Exterior Inspection: Landscaping and pool begins to look neglected, small repairs are not made. Home may or may not be occupied.
The distress phase when there is a certainty that the home owner knows they have to sell and it requires immediate attention. In a debt situation, usually 10+ month after lis pendens filing. Motion final summary judgment is imminent.
Exterior situation: Home may or not be occupied, however usually vacant. The lawn and pool is unkempt or overgrown, code enforcement violations, pool is unkept or maintained by preservation company. Notices on door and lock box on property. Utilities are usually off.