Black homeowners being hit hard by foreclosure crisis - Fort Worth Business Press

BY ALESHIA HOWE

August 09, 2010

As the nation’s foreclosure crisis has ripped through communities in every state, the National Association of Real Estate Brokers held a special “call to action” at its annual conference held in Fort Worth last week, saying the African American homeowner communities have been hit harder than other home owner segments.
The National Association of Real Estate Brokers held its 63rd annual convention in Fort Worth July 29 to Aug. 5.
According Vincent Wimbish, president of NAREB, the call to action will focus on ensuring transparency in all financial transactions, continued and expanded support for loss mitigation and pre-home purchase counseling services, restoration of sustainable homeownership as a viable wealth building option, and public policy “that prevents another economic tsunami from sweeping away the remaining hopes and dreams of the nation’s multicultural homeowners.”
And according to group leaders, the subprime mortgage meltdown and resulting recession is far from finished, particularly in the African American community.  According to the Center For Responsible Lending, 11 percent of African Americans already have lost their homes, or are in imminent danger of losing their homes, and it is projected that between 2009 and 2012, $193 billion in wealth will be lost in the African American community.
The Center for Responsible Lending’s June 18 report titled “Foreclosures by race and ethnicity,” estimates 10 to 13 million foreclosures will occur in the United States before the crisis abates. Today, the report states that 52 percent of the nation’s at-risk borrowers are non-Hispanic whites, but only 15 percent of that group is at imminent risk of losing their homes. Comparatively, black and Hispanic home owners at imminent risk of losing their homes tops 21.6 percent and 21.4 percent, respectively.
Wimbish used strong words in describing the consequences of his organization members not pulling together to support change in the current residential real estate market.
“The color is green,” he said. “We got bamboozled by Wall Street because 56 percent of foreclosures are not in our community, but our community feels the same affect because the only loans being done in the communities of color – black and Hispanic communities – primarily were subprime loans, so we’re asking partners to join us because the color is green. And if we don’t come together and address this issue directly, were going to all be back on a plantation.”
The NAREB organization is a minority broker organization with 88 chapters throughout the nation, including one in Fort Worth.
The organization has introduced a number of alternative plans including a 10-year tax credit program or mortgage products based on a client’s ability to pay rather than on that client’s credit score, which is traditionally is how banks determine a client’s risk factor and ability to re-pay a loan.
“We are advocating that they create mortgage products that are not based on or determined by credit scores only. We want mortgage products based on loan to value, industry standard loan to value, a modest down payment,” Wimbish said. “The down payment HUD has currently is 3.5 percent and 3 percent seller concessions, but we know in our community we are advocating they target foreclosed properties and up to 6 percent seller concessions.”
Wimbish said Wall Street credit scores operate by predictable financial behavior – something that can sometimes disqualify some good potential borrowers.
“In lieu of credit score, we are advocating that they create a mortgage product that you can alleviate predictable financial behavior by having a consumer agree to automatic payment,” Wimbish said. “That way you don’t’ have to worry about getting your money because you know when they get paid, you collect that mortgage payment, if that’s a weekly, bi-weekly, or bi-monthly payment.”
Terri Attaway, president and CEO of the Fort Worth NAREB chapter, said the Center for Responsible Lending numbers aren’t shocking as they reflect what’s happening in the market today.
“It definitely is tougher out there,” she said. “You have to drill deeper now more than ever to educate people. But it’s still a great time to buy and if you can educate, then it’s good for everyone.
One such local program is offered by the city of Fort Worth and includes grants of up to $25,000 if one buys a home within a specified seven ZIP codes, which are the areas of the city most affected by foreclosures. Attaway said that program has many “hoops for home owners to jump through but the end result is worth it.”
“They have to do things like take a class, but our chapter offers a class that would qualify for that,” she said. “And any property where you stand to get that kind of help is worth it.
Attaway said another issue coming down the pipe will be an increase in FHA standards. Attaway said she recently heard talk that FHA, which now does not lend to anyone with lower than a 580 score, will open up loans to individuals with 500 to 580 credit scores – if they put 10 percent down.
“FHA already raised the down payment from 3 to 3.5 percent and there are a lot more changes coming and people have got to stay informed,” she said.
Maurice Jourdain-Earl, founder and managing director of Compliance Tech, also presented at the conference his soon-to-be-released report titled “By the numbers, disparities in credit availability for African Americans and Latinos 2004-2008.” The report, which will be available in the coming months, is based on data derived from the Home Mortgage Disclosure Act and, according to Jourdain-Earl, shows that African Americans and Latinos are disproportionately affected by the lack of credit.
“These perceptions are continuing to drive these disparities that will have a disproportionate impact on communities of color,” he said at the conference.
Jourdain-Earl touched on strategic defaults by home owners, or home owners who have decided it makes more sense for them to turn over their keys to the bank and walk away from the home because the home is worth less than what they paid for it originally.
“Those strategic defaults are increasing and believe it or not, many of those strategic defaults are not happening with low or moderate income or minority consumers, but mostly with middle and upper income folks who have made the calculus just like with any other investment that it is easier to walk away,” he said.

99 Real Estate Leads and No Real Estate Deals?

Some say there is an industry standard that says:

“For every 20 real estate leads you call, you’ll get at least 19 No’s and 1 Yes.” Well, imagine contacting 99 home owners who had a home to sell and having nearly all of them say “No” to your business.

In this blog post I’m going to tell you why and how this happened to me so you’ll know what not to do when talking with real estate leads.

A few years back I came to a point in my life where I wanted a real estate deal really bad! I wanted a deal so bad that I pulled out some old newspapers (a few days old) that I had been saving and circled all the real estate leads I wanted to call. My goal was to call 100 home owners and at least get my first deal.  Statistically I guess I should have a goal of getting at least 5 deals, but I would have been satisfied with 1 real estate deal.

So I picked up the phone and started dialing…

Ring Ring Ring!

First call goes straight to voice mail. I leave a message.

Ring Ring Ring!

Second call goes straight to voicemail. I leave a message.

Ring Ring Ring!

Third call goes straight to voice mail. I leave a message.

Ring Ring Ring!

Fourth call goes straight to voice mail. I leave a message. (I’m getting a little annoyed now)

Ring Ring Ring!

Seller Says: “Hello?”

I introduce myself and begin running through my script of what to say…*Click* in mid sentence.

First rejection…It’s cool. I have 95 more real estate leads to call, so it’s not a big deal.

As I began dialing number after number, it was like a pattern of voice mails and rejections. There were some soft promises of, “I’ll think about it and get back to you”, yet not a single firm Yes!

I burned through 99 real estate leads and didn’t get a single deal.  It all happened in one day and by the end of the day I was completely exhausted and didn’t even bother calling the last lead!

I seriously doubt it would have been a deal. Now that I think about it…I know it wouldn’t have been a deal given my state of mind after being completely drained.

What happened that day? Why wasn’t I able to nab a deal?

After analyzing all the conversations and analyzing myself.

Here some of the main problems I noticed:

Reading From a Script & Not Being in Control

Reading from a script is ok, but you don’t wan to sound rehearsed. If you’re going to do it then you at least have to make it sound natural to the person on the other end. Reading from a script can help guide the conversation and get the answers you need to make a decision. However, it’s important to position yourself accordingly when you’re on the phone. How do you sound to the other person on the end? Do you sound like a buyer/investor or do you sound like a salesman?

Many people get frustrated when they get phone calls out of the blue and you have to be able to build that rapport (relationship) from the beginning in order to set the tone for the rest of the call. If you’re on the defense in the conversation, then you’re climbing an uphill battle because you’re answering the majority of the seller’s questions instead of the other way around. Rapport building points are not something you’re likely to find in a script.

These were the problems I had. I didn’t build rapport. I sounded rehearsed and didn’t maintain control of the conversation. I didn’t position myself as a solution.

Not Listening during the conversations

The problem with using a script is that it could prevent you from listening to the seller unless they answer the question you happen to be on. My advice has always been to use a script as a guide or memory jogger because there will be questions that you need to ask and they might not be on your sheet.

A perfect example of not listening was when a motivated seller was telling me about their home repairs and then moved on to telling me about the neighborhood. After she finished discussing the neighborhood, I said, “So does the home need any repairs?” She called me out right on the spot and said, “Weren’t you listening?” I was kind of listening, but that just happened to be the next question on my script. You absolutely must listen when talking to people on the phone or you’ll likely lose out on the deal like I did.

The presence of negative energy

As I dialed number after number I didn’t take any breaks. Maybe to run to the bathroom or grab a quick glass of water. Other than that, I was diving striaght through this list like no tomorrow. As I kept getting voice mails and kept getting rejected, I would get more and more frustrated. If you get frustrated during a process like this, you’re frustration (negative energy) can easily carry over to the next call and it can be heard by the person on the other end. This can be a big turn off and the conversation will get cut fairly quickly. My advice is to take breaks and stay positive. Motivate yourself or talk to someone who can make you feel better. Then continue on with taking action.

Have you ever talked to someone on the phone and you can just hear a negative attitude in their tone? It’s like someone pissed in their cereal. Sometimes I’d get negative energy from some leads as well. Some either assumed I would low ball them because of being an investor or some just didn’t feel like talking. They had the old “Are you going to buy at full price or what?” mentality. Those are the type of real estate leads, I simply don’t deal with. My time is too valuable and if we’re going to do business, then we need to be on the same page.

Contacting unmotivated real estate leads

Let’s face it! A big handful of the leads I was contacting were unmotivated. As I analyzed all the things I was doing wrong, I also noticed that I was talking to people who wanted to sell, but didn’t need to sell. Motivated leads need to sell their home because there is some sort of problem that they desperately need to get rid of. Foreclosures are huge problems right now and many people out there need a solution.

If you talk with people who say they have time to wait and aren’t looking for a quick sale, then they are most likely unmotivated. It’s one thing for a person not to accept a low offer. It’s another thing for them to tell you that they’re not in a hurry before they even hear your offer. I’m not one to make insultingly low offers, however I do need to position myself to make some money. This is a business and if they have a problem with you making money more than you helping them sell their home fast, then they’re not that motivated. Unmotivated sellers can waste your time, so it’s best to end the call quickly and move on.

Understanding that No means No!

As I write this blog post, I had to stop for a few seconds to answer the phone. It just happened to be a telemarketer. How ironic is that? She wanted to give me an estimate on my windows. I told her I’m not interested. She said, “Well have you changed your windows?” I said, “Yes, but I’m not interested in any additional remodeling right now.” She said, “Well we also do estimates on sliding doors and our estimates are good for 1 full year.” I’m not INTERESTED! (My tone raised a bit). She said, “Ok thank you for your time!”

This made me think back to how many times I was told “No” on that dreadful day and how I kept trying to sell my real estate services to the person on the other end. There was one call in particular where a person kept saying that they weren’t interested and I kept trying to push and convince them. If it’s one thing I’ve learned and have been taught over and over again, you never want to try and convince someone to do business with you. It’s either they get it or they don’t. Your time is better spent with people who get it because the majority of your deals will come from people who will do whatever it takes to get rid of their problem. Position yourself as a solution and 9 times out of 10, you’ll get the deal.

Cold Calling versus Direct Response Marketing

The last point I want to make is that cold calling a real estate lead verus having the lead contact you can play a role in getting the deal as well. I’ve always believed that if a lead contacts you, then they are much stronger. Why? Because they saw you as a potential solution and they picked up the phone and dialed your number. They may have even taken the time to visit your website and fill out all the required information you asked them to fill out. If they’re not motivated, then they most likely won’t even do that.

This is exactly why I now concentrate on attracting motivated sellers and buyers. I have no doubt in my mind that cold calling works. In fact, I still do it every now and then. However, when you can pick up the phone and say, “How can I help you?”, you instantly gain control of the conversation because you’re asking the question and you’re letting them know right off the bat that you can be a potential solution.  It would be kind of strange to call someone out of the blue and say “How can I help you?”.

If you’re able to elicit a direct response from a real estate lead, then you’ve achieved the goal of direct response marketing. All you have to do next  is close the deal…if it’s really a deal!

I’m sure there are tons of reasons why I didn’t get a deal that day. However, in this post I wanted to point out the major ones that I knew contributed to that day.

Can you think of more? Have you ever called a bunch of real estate leads in a single day? What was your experience?

Share below by leaving a comment.

To Your Success,

J. Lamar Ferren
New Breed Investor

Realtor Leads: Can They Really Help You To Make Money?

Do you know anything about the realtor leads? Do you have some ideas about what they do and their many services that you can acquire from them? Do you also know about their specific functions and as to why they do exist? If you don’t know any sort of things about the sad matter then reading the entire content of this blog post article would definitely be a helpful sort of way for you to know some things about it. For your great information, there are actually several and various sorts of alternatives on how you can possibly be able to find the most efficient and or formidable type of realtors today.

One of the most effectual ways on how you can possibly seek-out for the most formidable and or efficient sort of leads is through the utilization of the email leads, phone verified leads, internet leads and so many more types of leads.

How can you specifically and efficiently check-out if you have been able to find and use a formidable sort of realtor leads? How can you specifically be able to know if what you have chosen is high in quality and or profitability and not just a certain senseless data that had already been used and tested by several individuals to be such of an inefficient sort of lead?
To let you know, you can surely be able to get the best type of leads through simply using the internet as the main passage of getting what you need and want about the said type of matter and this is according onto the experiences of certain brokers.

You should know that there are already many brokers today who had been very successful through the great help of the real estate broker leads that they have got out from the internet.

In fact, aside from that of the successful independent brokers today, there are also certain broker firms and companies that had also been successful through simply using the realtor leads that they had acquired out from that of the usage of the internet. You should know that relying onto the internet in getting reliable broker leads is such of an efficient sort of approach and this is because of the matter that there are already numerous numbers of brokers who have been triumphant in each and every time that they had conducted a particular sort of broker transactions such as that of selling, buying and commercializing and or endorsing certain kinds of properties.

Through simply depending onto the internet, you can definitely make your search for the best types of realtor leads a certain kind of success. You should know that there are several and various real estate broker companies and firms that had been successful in all of their attempts to meet their expectations upon selling, buying, endorsing and or commercializing particular kinds of real estate properties such as that of the homes or houses, condominium units, apartment homes, commercial buildings and a lot more.

Despite of the fact that you really can be able to seek-out for the best sorts of realtor leads via internet these days, there are certain sorts of considerations that you greatly need to have in hand and this is because of the fact that all things have its own advantages and disadvantages.

If you have some plans to start doing a real estate business, you greatly need to start purchasing efficient sorts of realtor leads coming only from those that are formidable and professional real estate brokers.

You should know that the there are certain problems that you can possibly encounter most especially if you have chosen a low-quality type of broker lead. You also need to know that there are certain mortgage and or real estate broker firms and individuals that are just greatly efficient by its name but not really by its deeds, services and actions.

This kind of matter is just like that of buying a wrong kind of medicine for a certain sort of illness and or ailment. However, if you are just able to look out for the most efficient and recession-proof kinds of realtor leads then you can definitely say that succeeding in the said kind of business would just be like that of eating a piece of cake.

Moreover, can you really entrust your confidential real estate business schemes and or plans onto your chosen broker personnel and or firm?
Well, trusting a certain sort of broker firm and or individual is greatly a helpful way for you to seek for an efficient kind of realtor leads and this is because of the matter that they can really provide the best sorts of ideas, tips, advices and suggestions on how you can possibly meet your real estate business goals and or targets.

On the other hand, you greatly need to ensure that your chosen broker really has what it takes to be considered as a reliable source of accurate and efficient types of realtor leads. Because if you will not do this kind of thing then it is very certain that you will just waste your time, money and effort upon searching for the aforementioned kind of matter.

You should specifically know that not the entire realtor leads that you can seek-out over the cyber world are efficient enough to help you in meeting your real estate business dreams. There are just a few that are really efficient and the rest are just pure scam. Therefore, you really should be very careful in choosing the kind of lead that you want to use in your real estate business. In this sort of way, you can be sure that you are investing your finance, time and effort in the right kind of way. Lastly, you should make it sure that you have selected a legitimate kind of broker firm so that you can assure to yourself that you are in good hands.

Investing � Five Factors to Consider Before Investing in Residential Real Estate

During the past decade, many people have jumped into residential real estate investing. This was never so true as during the recent real estate boom. People read all the “get rich quick” schemes that litter the book shelves of libraries and book stores — use other people’s money, use no money of your own, and make millions! A lot of people did make great sums of money during the most recent boom; but now those, who did not get out before the market cooled, are seeing those investments in foreclosure due to their inability to make the mortgage payments.

Just because the real estate market isn’t over the top, as in the past few years, does not mean you no longer can make money in residential real estate. The difference between now (post-boom) and during the market boom is that the “get rich quick” schemes will not work.

Do You Have What It Takes?

Investing in real estate is not for the faint hearted, the non-risk takers. It is for investors who are in it for the long haul, who can easily sit on their investment (if need be) until the market shifts in their favor. It also is for those who truly enjoy this type of investment. They are the ones who are the most successful in real estate investing.

You must be willing to invest time — upfront and before each potential investment. If you do not take the time to research the properties and your target market, you probably will not be very successful. You also must gather knowledge on how to make a real estate deal that works in your favor. That requires educating yourself to understand the jargon and game rules. Today, it takes a careful, methodical approach to residential real estate investing, especially when acquiring your first property.

Besides needing time and money, being a risk taker, and being willing to commit to a long-term investment, if needed, there are five additional factors you must consider each time before you make an investment in residential real estate.

Supply and Demand — Where Is the Current Market?

The economics of supply and demand is what makes the long-term investors successful in residential real estate. They are willing to weather the ups and downs of the real estate market, waiting for an advantageous market to sell their property.

Supply and demand is influenced by many economic factors, which in turn affects the residential real estate market. Well-located residential real estate will endure fluctuations in the market and continue to appreciate in value. Knowing your market means knowing when to buy or not to buy, which deals will work when, and when to sit on an investment or sell it.

Your Creativity

Another factor to consider is your own creativity in managing your investments. Residential real estate is one type of investment that allows for a lot of creativity:

• You may invest for the long term, renting the property to continue making a profit while waiting to sell at a more advantageous time. You can purchase a home to fix up and resell immediately for a profit.

• There are many financing options available for residential real estate, allowing for even more creativity. You also can invest on your own, with a group of partners, with a corporation, or even with a Real Estate Investment Trust (REIT — a mutual fund with real property assets or mortgage securities).

• There is an abundant variety of residential real estate types in which to invest — single-family homes, townhouses, condominiums, and duplexes.

The more creative you are in creating and managing your real estate investments, the more profitable and successful you will be.

Other People’s Money

A third factor is knowing how you can use other people’s money to your advantage without landing in foreclosure, as so many people now are who subscribed to the “get rich quick” schemes during the boom.

You can begin with only a few thousand dollars, using other people’s money to underwrite the remaining mortgage. You must know all the different ways available to finance your investment. This goes back to taking the time to educate yourself, before you begin investing, and creatively making the best use of financing.

Other People’s Time

Whether you are fixing up real estate to sell or renting it, it will take time, effort and management. If you already have a full-time job and a family, you probably cannot do it all yourself, and I doubt you wish to be woke up at 2 a.m. by a renter with a plugged toilet.

Using contractors to fix up the property or experienced property managers to handle your rental real estate makes for less profit in your pocket on your individual investment properties. However, it frees up your time to invest in more properties, making your overall profits much higher.

Your Tax Advantage

Residential real estate investing is quite unique. It offers you tax write-offs not available in other types of investments. There are many deductions available to you — deducting the mortgage interest or refinancing without being taxed are just two examples. There are many benefits to real estate investing that reduce your tax liability and increase your profits.

If you believe residential real estate investing is for you, begin by learning more about it. There are thousands of books and resources on the topic. Stay away from anything that sounds too good to be true. It probably is, especially in today’s real estate market.

Making Money With Wells Fargo Foreclosures

Because of some mitigating circumstances, many homeowners were forced to renege on their obligation to pay their mortgages. This resulted to thousands of Wells Fargo foreclosures offered for sale on the market daily. 

This opened a floodgate of smart investors and first-time homebuyers who want to buy bank foreclosure properties either to live in, rent out or re-sell. Wells Fargo foreclosures are very cheap, selling as low as half their current market value. The explanation for the low prices is very simpleWells Fargo does not want to be saddled with unprofitable properties so it would prefer to sell them at low costs. 

Where to Find Cheap Bank Owned Properties:

Any smart investor can tell you that you can profit from a real estate if you buy a property at a very low price and sell it for a substantial profit. So start by looking for bank foreclosures that are cheap yet in good condition. To save you time and effort, subscribe to foreclosure listings. A foreclosure list is the secret weapon of many smart investors. This is the tool that enables them to get ahead of their competitors.

Subscribing to foreclosure listings gives you a chance to know about new foreclosures as soon as they are placed on the market for sale. And you will know every new foreclosure home in all major cities and towns in the country even without leaving the comfort of your home or office just by subscribing to foreclosure listings.

Buying Bank Foreclosures:

You can buy bank foreclosed homes at auctions. Buying at auctions gives you an assurance that the properties are really at their lowest market price. However, because buying means bidding on the property, there is a great possibility that you will get carried away by the excitement of the process and end up overbidding on the property. You can avoid this mistake by setting the amount that you can afford to pay the property.

Learn everything you can about the foreclosure investing market and give yourself an edge over other buyers who are hunting for cheap Wells Fargo foreclosures.

Making Real Estate Money-Hardest Hit Fund Program-Saving Your Home From Foreclosure

Hardest Hit Fund Foreclosure Prevention Funding Round One
On June 23, the Obama Administration approved proposals put forward by Housing Finance Agencies (HFAs) in Arizona, California, Florida, Michigan and Nevada for utilizing a total of $1.5 billion “Hardest Hit Fund” foreclosure prevention funding. This aid will support innovative local initiatives to assist struggling homeowners, as part of the first round of funding available under this new program.

President Obama established the Hardest Hit Fund in February 2010 to provide targeted aid to families in the states hit hardest by the housing market downturn. The states approved to receive aid as part of the first round of funding each experienced a 20 percent or greater decline in average home prices.

Approved states will now begin to set up and roll out their specific Hardest Hit Fund programs in order to provide relief to struggling homeowners as soon as possible, with specific implementation timing depending on the types of programs offered, specific state-level procurement procedures, and other factors.

Each state’s approved “Hardest Hit Fund” proposals and contact information are available below. For more information on a state-specific proposal, please contact that state’s Housing Finance Agency.

Arizona
Proposal 
For more information: http://www.azhousing.gov/ShowCat.aspx?CatID=8&id=1

California
Proposal 
For more information: www.keepyourhomecalifornia.com

Florida
Proposal 
For more information: www.floridahousing.org/hardesthitfund 

Michigan 
Proposal 
For more information: www.michigan.gov/mshda

Nevada
Proposal 
For more information: http://www.nahac.org/

Making Real Estate Money-Foreclosures

Buying Foreclosures

Foreclosures are divided into 3 phases.  First phase is the pre-foreclosure and that is when the home owner is still in control and if they have any equity then you can work directly with the home owner.  How ever if there were no equity you would want to do a short sale.  The second phase is the auction; this is usually reserved for the experienced investor because of the financing, the property inspection, and the attached liens.  The third phase is what we call the REO; it stands for real estate owned.  This is where the property has not been sold at the auction and the lender gets it back.  This is the safest way to buy a foreclosure because all the incumbencies have been removed and you can also inspect the property before you buy.  Now I am going to say this and it is very important.  Not all foreclosures are a good deal.  So it is important that you act like a real estate detective and get all the facts about the property before you buy.  This is a very important part of the process and the more you know about the deal the better it is going to be for you.  It really is all about the numbers.  Now that sounds simple but it really is not.  When I say it is all about the numbers I mean the number of properties to choose from, the amount of research that you do, the cost and expenses versus the potential profits, and the number of offers that you make.  So depending if you are in a deed state or a mortgage state the foreclosure process could take anywhere from 21 days to 120 days or longer.  If your in a state that gives you a shorter time to do your homework, you need to find the most efficient and fastest way to make a decision about each property that you are interested in.  So remember a foreclosure is an opportunity to find a good deal.  It is not always a good deal and in today’s market there are some homeowners that are being evicted from their homes and they are leaving their properties in a complete state of disrepair.  They are putting holes in the walls, taking out appliances, ect.  So if you are if you are looking at a property that you are not allowed to go inside and se the condition of the property.  You might be buying a property that would easily cost you more to fix up than it is worth.  So again be sure to so your due diligence on each and every peace of property.

            Well people say why invest in foreclosures?  Simply foreclosures are at all time high which presents an outstanding opportunity.  High instant profit margin for the well-trained investor.  You can buy at a steep discount in m any cases.  The future trends for finding deals are up because borrowers are defaulting on their loans, A.R.M.S are resetting to higher percentages, falling property values, balloon notes coming due, unstable money markets, and security markets causing financial loses and uncertain economy which leads to layoffs.  There is always a steady inventory of new property.  Foreclosures are not really understood well or worked very well.  Most people don’t even understand the process;  there is minimum good information available to the public. 

Some properties can be purchased for little of your own money.  As we said before the sellers are definitely motivated and banks don’t want properties so they want to get rid of them as quickly as possible. 

            Why are foreclosures growing?  Foreclosures area fact of life.  Anytime a debtor breaches an obligation of a security document, like a mortgage deed, trust or something like that.  The lender has the right to foreclose on the property.  The grantor most likely does not want to acquire the property but they do want repayment of the funds owed.  Now in today’s markets we are seeing lenders lowering interest rates.  Extending loan terms and there is even talk about forgiving of the mortgage amount.  Even so there are tons of foreclosures to work.  There is an orderly process to the foreclosure, which allows the opportunity to cure the situation.  However some homeowners are not in a position to cure the default.  This may happen because a number of reasons.  Loss of job by one or more home owners, financial crisis need for immediate cash, a health or maybe family problem, business failure or down turn, divorce between couples causing a need for property liquidation.  Death of the property owner resulting in payment default.  Adjustable rate mortgages can increase quickly in times of high interest rate and result in the property owner not being able to make payment.  Balloon payments, these are large payments that cause challenge for the homeowner.  Job transfer, borrower may have two mortgage payments, out of state owner or out of Towner.

            Lets talk a little bit about pre foreclosures.  Many times you can catch the situation before the property has gone on the auction block.  We call this time period pre foreclosure.  The property is in default and several months behind in payments.  The owner may have no means of curing the default yet the clock is ticking towards the time the auction will take place and everything will be lost.  Now given that a foreclosure on a persons credit record is the single most devastating item preventing any future borrowing for years to come.  A homeowner should be very eager and happy to work with you.  Without your help they might not just loose their home but their credit will be destroyed.  A fundamental key of making money in the foreclosure market is understanding why the property went into foreclosure.  Perhaps the owner just had a temporary cash shortage.  You may be able to help them and take an equity position in the property in return for rectifying the situation.  Or the owner maybe financially devastated and just wants to dump the property before their personnel credit is destroyed.  You can help solve their immediate problem and give them a new start.

            When we talk about finding foreclosures there are many sources to aid you in finding foreclosures.  Hopefully you can find the foreclosure before it is too far in the foreclosure process and all possibility of redemption has passed.  In today’s market there is more opportunity to find foreclosures than ever before.  Following are a few locations to begin the search and will be going into much more detail in other courses of this product.  They are classified sections, legal newspapers, attorneys, FSBO’s, realtors, auction companies, IRS auctions, bankruptcies, probate court, and county courthouses, town hall or registrar of deeds.