by Joe Safieh

Created on: August 29, 2008

A nightmare for the owner but an investor's delight. Foreclosures are at a record high in today's economy. The increase in inventory is due largely because of the subprime market of where banks financed with minimal guidelines to everyone of whom could qualify. If a prospective buyer had average or above average credit score and a steady job that paid for the last six months then banks freely and willingly provided the money. Interest only loans and creative financing was only at peeks high. Buyers over leverage that opportunity and acquired property slightly above their means. Come time the interest only loans approached their due stage owners faced a challenge. Today on a national level the credit scores of the majority have gone down while the qualification for a new loan has significantly increased. This creates less buyers, increases inventory, and drives the value of real estate down. With not as much qualified buyers in the marketplace who are ready, willing, and able to purchase real estate and the banks challenge to rectify its errors of the past inventory is at a record high.

A homeowner facing the dilemma of foreclosure today does not have the resources of which was provided prior. The availability of liquid money has decreased beyond measures thus providing a greater burden or challenge to rectify the matter at hand. In nonjudicial states after one month to three months of nonpayment the lender sends a notice calling below and do and to be paid in full. At this stage it is practically impossible to obtain a new loan. A homeowner must contact the lender and ask for a forbearance. If the lender is unwilling to provide a forbearance then the property is advertised for four consecutive weeks in the legal section of the county newspaper then sold at a public outcry in front of the courthouse steps regardless of rain or shine. To gain time a homeowner may file for bankruptcy of which then the property gets sold through the bankruptcy courts. Prior to filing for bankruptcy or if facing foreclosure it is helpful to schedule and attend a local consumer credit counseling in the state in which you reside. The consumer credit counseling is a nonprofit organization of which can provide great guidance.

If a property has little or no equity the home owner in default must list their property with a licensed real estate agent in the open marketplace. The real estate agent should advertise the property below market value and stipulate in the listing that it is a pre-foreclosure.

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