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What you should be aware of before buying foreclosures in the current marketplace

by Wayne Wargo (PenWay.org)

Are you in the market for a foreclosed upon property despite some of the possible headaches that go with it? It just might turn out to be a smart move and work out to your advantage.

Foreclosures are normally auctioned off or sold at substantially lower amount than the prevalent market prices with great terms like low interest rates and low down payments. Some foreclosure proceedings are held on the court house steps the first Tuesday of each month. Keeping an eye out for HUD foreclosures and houses. When real estate owners default on HUD foreclosure loans, HUD forecloses the properties and sells them to the general public at a public foreclosure auction. Finding and purchasing HUD foreclosures can help you save big on your next house or real estate investment property, often well below market value.

Nearly one million Americans have lost their jobs in 2008. The rise in job losses will increase and extend the delinquency trend. So far, foreclosures are up 32% from this time last year.

The nationwide average for foreclosures is 30%. Nevada continues to post the nation's highest state foreclosure rate. One in every 68 housing units in the state received a foreclosure filing - more than five times the national average.

Some investors are turned off by foreclosures, because they are typically older, lower priced homes in undesirable areas, but this trend is also changing. New homes are now making up an increasingly larger piece of the foreclosure market.

The foreclosure free-fall has trapped families in home loans they cannot afford. A way to keep families from losing their homes and to stabilize the housing market, now and in the future, is to promote affordable loan modifications and to regulate mortgage lending so that this type of crisis never happens again.

Foreclosures are also known as REO (Real Estate Owned) properties. If you are searching for these properties either to sell them again in the market or for your personal use, the best way to find them is through Internet or online listing of bank foreclosures. You can also look for properties that require repairs, as banks may sell them at a discount, rather than do the repairs themselves.

Foreclosures are bringing us some of the most anguishing issues of the time - a tanking housing market, a paralyzing credit crisis, sub-prime loans and bankruptcies - to all of our doorsteps. Sub-prime loans were originally intended for those borrowers with blemished credit, but eventually fell into common usage. In the first half of the decade tens of thousands of loans were approved without regard to income or credit scores.

Although we never seem to hear about it, many people believe that illegal dumping of household property and trash is on the rise. Some neighborhoods report that such items as worn-out mattresses, chairs, dining room table sets and the like are being dumped in many parts of cities.

When foreclosures are rising and housing prices are in decline, we need to remember that this situation can undermine household wealth.

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