The Foreclosure Report

Competition Heavy For Foreclosures

Steve McLinden at BankRate.com has this advice. "Experts foresee a wave of loan defaults as easy credit standards come back to haunt buyers. For astute investors, though, opportunities will abound. Many economic experts are predicting that mortgage delinquencies will rise up to 15% in 2006 among homeowners with higher-cost or 'subprime' loans."

"About 19% of all U.S. home loans are now subprime, in contrast to just 5% 10 years ago, according to the folks at Fitch Ratings. A lot of those homeowners with adjustable-rate subprime loans will see their loans reset at higher interest rates in the coming months."

"Foreclosure buying is a very competitive game right now, with so many real estate gurus advocating the strategy in books and seminars, and on TV and the Internet. Just do a Web search under 'foreclosure opportunities' and you'll see what I mean. Obviously, more and more buyers, particularly investors, are looking for an advantage in the game."

"Buying a 'pre-foreclosure' from a defaulting or financially strapped owner might be the best way to go on the consumer end. The county clerk's office keeps lists of such pre-foreclosures. Seek out titles where a 'lis pendens' notice has been filed by the lender."

"Before contacting and engaging in negotiations with the owners of these properties, make sure you are pre-qualified for a loan. You'll probably want to enlist a buyer's agent to make sure your best interests are represented and that you make the right offer, which would ideally be at a below-market price. Finding an agent with foreclosure experience would also be a plus."

"The foreclosure-property auctions that you see advertised are usually the realm of more heavily bankrolled professional investors who stand ready to pay cash for a property. If you are brave and well capitalized, you might try your hand at it. You might want to attend one or two for observation before acting. Whichever approach you try, don't give up if your first few efforts don't pan out."

posted by Ben Jones @ 7:18 AM