Foreclosures and Pre-Foreclosures

“Buying a foreclosure can be a lucrative investment, locating a foreclosure before anyone else or a property in pre-foreclosure stage allows you to be the only person negotiating with a motivated seller.”
The recent real estate boom inspired mortgage financers, to increase the number of sub prime mortgages given to people considered high risk has now has fueled the current mortgage meltdown. 

As always, an opportunity presents itself.  Buying a property in pre-foreclosure involves approaching the borrower or owner and offering to buy the property outright which means at a discount. The added value this system is, the owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. This pre-foreclosure process also gives the buyer the time to research the title and condition of the property.  Deals of this nature typically realize discounts of 20 to 40 percent below market value.  In today’s heated sub prime market, those numbers are very realistic.
With the foreclosure rate running at a record-setting pace it is understandable why many homeowners are willing to do anything or sign anything to keep from losing their homes. 

Clearly today’s market environment is attractive to the pre-foreclosure investor. According to the Mortgage Bankers Association, consumers with normally good credit are also defaulting on their mortgages. More than 5 percent of loans across the country were delinquent, up from last year. It should be noted that delinquent loans do not include homes in foreclosure however they maybe in the pre-foreclosure stage. Equally noteworthy, trillions of dollars in mortgages will reset by year’s end so homeowners who were able to pay their mortgage bills until now, may be at risk of missing house payments as well.

If you are in the pre-foreclosure market, with some additional effort, you can find these homes and properties.  As you become acquainted with these contacts, you can tell them the type of home you are looking for and the area. If you check regularly, you may obtain information on homes before they are added to public databases.”

Foreclosures Up tick On National Level

The United States, over the course of the last year, has experienced a steady rise in the foreclosures.  Analysts predict that with rising interest and inflation rates along with high housing costs, the future outlook of foreclosures remains substantial. In fact, many believe the foreclosure rates will reach record levels within the coming year or so.

However, there is a compelling home business opportunities in preforeclosure real estate investing. In case, the investor actually produces a win-win scenario for all parties involved. “Preforeclosure investing is the perennial wealth builder, and the transition from working a job to achieving wealth through real estate investing is becoming increasingly well documented.You've probably thought about investing in real state yourself but you've haven’t tried due to lack of information or training.”

Opportunity Knocks Hard

According to the U.S. Foreclosure Market Report, 92,845 properties nationwide entered some stage of foreclosure during July of 2009. This is a 5 percent increase from the previous month and an 18 percent increase since July of 2008. The report also indicates a national foreclosure rate of one new foreclosure filing for every 1,245 U.S. households.
 
For example in Georgia, where there is a very large preforeclosure market.  The Atlanta area has more than 3,000 Notice Of Foreclosures published each month in the 13-county area, which offers far more real estate opportunities then anyone one investor can handle.

A good real estate investment course would inform the student investor that a foreclosure in Georgia is a non-judicial process and all homeowners who borrow funds to purchase real property are required by their lender to sign a "Waiver of Borrower's Rights" at the closing table. This document notifies the homeowner that the lender can recover their secured interest in the real property by non-judicial foreclosure.  This is a real opportunity the preforeclosure investor to work with homeowner.

Underlying Reasons

The question is always asked during a national concern, how and why have so many homeowners defaulted on their mortgage payments? While in circles, the pessimistic contention is that some people do take out a home loan with the intention of defaulting. we understand that while high interest rates and inflation do have adverse effects on homeowners in general, as a property owner, I’ve been in the very situation, however I’ve trained myself become a debt manager and I know how personal matters play a much bigger role in foreclosure situations.”