Investments in mortgage assets didn't wither with the recession. Loans are still sold, though the average discount is higher these days. Investors still do deals, sometimes purchasing defaulted loans in bulk. Then, like winning a bag of marbles and bringing them home, the next step is due diligence: see what's in the bag, and how to make the best of the deal.

What's changed? There are more troubled assets in the bag. Sure, everyone still digs through, looking for that shiny steely, an underpriced asset that can be turned around or resold. But efficiency demands that you do something with all those other marbles, too, preferably something cheap and fast.

Often, they're small assets: a borrower who is months in arrears, communicating poorly and either in bankruptcy already or looking longingly at the courtroom door. Handling these deals efficiently requires that we all update our old habits. The old-fashioned approach is: 1) Check out the property (and its leases); 2) Conduct a detailed review of the loan documents for flaws and the correspondence for defenses; 3) Pull the legal trigger on a foreclosure; 4) Get into some kind of dialogue with the borrower; 5) Start arguing, in a workout, cash collateral order, about the proceeds; and 6) Gird for a battle royal over valuation, reorganization or bankruptcy.

Workout lawyers love all that stuff, and they like fighting and winning intellectual victories on each point. Unfortunately, those matches may not always be worth it. They cost time and money, and your asset's value may not support that cost.

Nevertheless, three of those six habits you just can't avoid: 1) Check out the property, for a reasonable guess about value, and to make sure it's not on fire or hosting a meth lab. 2) Document review. This is vital in moderation. A note-investor's lawyer does need to check the documentation to confirm that you have a solid claim and no gaping holes. But a long summary memo might be overkill for a $700,000 loan on a $300,000 Dubuque strip mall. A $40,000 lawyer bill can take the fun out of an asset bought at a deep discount when you expect to clear only $50,000. 3) Start the foreclosure, if it's legally sound. But maintain a healthy skepticism about the other three. All of those steps can be appropriate, even essential. But not every one, and not in every deal:

Bargaining. When you take over a distressed asset, there's usually been some delay. If there's a clear, firm offer to make good, or amend somehow, fine: entertain it for a short, fixed period, if you wish. But drawn-out, half-hearted suggestions of a restructure just cause more delay. The chance to work out something, before final enforcement, needs to be short. Borrowers can take this advice too: if you have a firm offer get it on the table in writing.

Rents, Proceeds and Cash Collateral. Is the property really generating any money? Is it enough to pay the costs of getting the relief? Does it get you faster relief (a receiver, dismissal, etc.)? If not, just say no to arguing for marbles you don't need.

Take Your Best Shot. Whether your main enforcement activity is a bankruptcy proceeding, a foreclosure or something else, there will always be some side fights beckoning, and one or two main shots to win your asset. In a small case, don't run down every alley. Find the right fight and take your best shot. It won't always work. In a bag of troubled assets, there will usually be some really bad assets: such as a tough judge, tough facts or flawed documents. Still, a smart motion at the right time can often win. Pick your best point, take your stand, and go for it. Working efficiently on low-margin distressed assets takes trust between investors and their counsel. Smart investors can make better use of their lawyers by deciding up front what a given case is worth, what the various options will cost and which are cost-effective given the asset's value. Being clear about strategic goals and tactical choices protects both you and your lawyer. Without such an advance understanding, it's always safer for lawyers to take the belt-and-suspenders approach and to fight over every issue. No one wants to hear later: "We'd have won, if only you'd filed that Third Amended Martian Demurrer!" With good communication and targeted enforcement, though, even the common little aggies in your bag can be made profitable.

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