The real estate foreclosure process has become all too familiar to millions of homeowners. Did many of them make mistakes when they bought homes they could not afford? Did they find themselves upside down and were they forced to use credit cards to meet their monthly mortgage payments? Sadly, the answer for many of them was yes.

On the other hand, thousands of those middles class homeowners tried their best to find a way to head off a foreclosure. They made attempts to contact their mortgage holder to try to workout an extended payoff period. The problem was that thousands of other homeowners were trying to do the same thing and bank's loan mitigation departments were overwhelmed with requests for help.

Many facing foreclosure actually were able to find buyers for their homes if they could get the bank to agree to a short sale. Here again, the lender was so backed up with similar requests that the homes often went to foreclosure auction before a reply was received from the bank.

Lenders were forced to make business decisions that led to a complete breakdown of the real estate finance system. We won't waste time here pointing out that the genesis of the crisis was centered in Washington DC and a certain group of politicians.

With no where to turn who can blame many of the home owners facing foreclosure for just walking away from their homes. Some had the courtesy to drop their house keys into an envelope and send them back to the lender. That was so widespread that it became known as "jingle mail".

We would never advise anyone to walk away from a home just because they couldn't make the mortgage payment. Why do it? There are tens of thousands of foreclosed homes sitting vacant in the U.S. How many months do you think it will take lenders to begin asking people to vacate those homes?

There are not an army of buyers eager to buy homes. Banks don't have enough people employed to even make one visit to many of the homes they have acquired through the foreclosure auction process.

My advice is to stay in the home until you are asked to leave. Even then stall as long as you can. Congress is considering all kinds of giveaway programs and you might find that some type of rescue plan falls right into your lap. During the time you remain in the home you will be free of monthly payments. Begin saving every nickel for a fresh start when you are asked to move.

What about investing in foreclosure homes? There are plenty to choose from and prices have come so far down from peak-of-the-bubble prices that they all seem to be bargains. Recent figures show that home sales have risen slightly, but prices are still trending down… and there's the danger. Exactly what is the true value of a house today?

The U.S. is in for a few years of serious financial problems. What seems like a bargain today could be a buying disaster a few months from now. The long uptrend in home prices has been broken and it could be years before it is reestablished.

If you can buy banked owned homes by the dozen you may be able to get them so far below market value that you will be protected from any further drop in price, at least for awhile.

Another tactic is to have a plan that will allow the houses you buy to produce profitable income no matter what happens to values. One way to do that is to revert to the old fashioned idea of room rentals. Many workers will be losing jobs or taking employment at a greatly reduced earning level. They will need a place to live. You can generate more income by renting rooms rather than renting the home to one person or family.

The world is now living in a "bail out" economy. You must adjust to prosper.