April showers are not only bringing May flowers, but also lots of good news for our clients in the foreclosure market! We are seeing declining home inventories in Detroit, Phoenix and San Diego, and tax credit checks are going to start being funded on May 1st. Wherever you are in the country, you have the opportunity to use your additional income to give your marketing campaign a jumpstart with the extra money. With the real estate market beginning to turn, now is the time to buy low and sell high.

Not only can you help the country and the real estate market this month, but you can also improve the foreclosure market by writing your elected officials to encourage them to pass the S. 2636, the Foreclosure Prevention Act of 2008. This would allow for a tax credit of $7,000, allow the FHA to insure loans up to $550,000, and it would really put some momentum behind the real estate downturn.

What does this all mean? Now is the time to get into the real estate market! Put your tax refund to good use, make your voice heard about the Foreclosure Prevention Act of 2008 and the sky is the limit.

What to do if you are facing foreclosure?

With the media using the word foreclosure day after day, it is easy for people to become desensitized to the deep impact a foreclosure can have on a person's life. But, the worst possible thing a homeowner can do is ignore the situation because this will make the problem much worse and leave fewer options. While a foreclosure can be very difficult on homeowners, this burden can be diminished by accepting the situation and searching for solutions early.

From my experience as the founder of Default Research, I can't stress this enough—get started early! We have seen so many foreclosure stories end well when families who are 30 days overdue begin to assess their financial situation and find solutions to their growing problem. In my opinion, the best method to determine if a family can afford to stay in their home is to calculate their loan payments using the prime interest rate. If this payment is still too high, then the family has one option—to get out of the home. The family should consider listing their home with a realtor immediately who could advise them on a price that will allow the home to sell quickly. Another option is to consider selling the home to a real estate investor which will help the seller avoid paying the six or seven percent commission to the broker. Finally, a seller can always look in the newspaper classifieds for people interested in buying homes.

If the person in trouble believes they are just in a short term income "slump" or can afford payments at a lower interest rate, then they will most likely be able to remain in their home. Once they make that determination, their first job is to examine their monthly income and expenses. Then they need to call a lender and ask for their loss-mitigation department. The owner must honestly inform the lender of their situation and the lender should be willing to negotiate by waving penalties, renegotiating rates, etc.

Worst case scenario is when an owner owes more on their home than it is worth. This is known as being upside down on your mortgage. This is where the short sale comes into play. Essentially, the owner will negotiate with the lender to sell the home for less than the loan balance. There are various ways of handling this. Contact the bank directly and tell them that this is what you are interested in doing, work with a realtor who specializes in short sales, or work with a reputable company that specializes in short sales.

Those are all possible solutions to the growing foreclosure problem in our country. Here are some unfortunate trends we have seen with homeowners in foreclosure.

(1) Statistically, over 50 percent of homeowners in foreclosure are either in denial or ignore that fact that their home is in foreclosure. This is a major problem because, if the homeowner does not accept that fact that their home is being foreclosed upon, there is no way to help them. The faster a homeowner can accept the idea that they are facing foreclosure, the more options are available to them. Waiting a week before the auction and then trying to cure the foreclosure leaves you with very few, if any, options.

(2) We have found that approximately 20 percent of homeowners just pack up and leave their homes. This option is not a good one either. By doing this, you may be missing out on the equity that has been built up in your home, face a foreclosure on your credit report, and opening up the possibility of the lender suing you for the balance of the loan (deficiency.)

(3) Some homeowners have purchased homes that they just couldn't afford. In these cases, the homeowners must accept the unfortunate fact that they will not be able to remain in their property. This is a hard pill for some to swallow, but the fact is that if you can't afford to make the monthly payments along with the taxes at the prime interest rate, you can't afford to remain in the home.

Default Research April Poll

Default Research is constantly trying to improve our product. Please select which item would help you be more successful in your investing:

Not All Bad Foreclosure News

We have already established that every time we turn on the news there is bad news about the foreclosures all across the country. I am going to be the bearer of more good news: the outlook in Seattle is relatively good.

Our research showed that foreclosures in the Seattle area declined five percent last month and that area continues to avoid major foreclosure crisis. Foreclosures in King, Pierce and Snohomish counties declined by five percent last month and the total number of Notice of Trustee Sales recorded in March totaled 379 in King, 380 in Pierce, and 215 in Snohomish. If you want more information on one of the safest real estate markets in the country, go to our foreclosure blog—defaultresearch.blogspot.com

Pre-foreclosures: How Fortunes Are Made

--By Jeffrey Ringold
All rights reserved.

What is pre-foreclosure? Pre-foreclosure is the time period from which the bank gives notice of default, once the homeowner is approximately 90 days late in payments, to the time the house sells at auction. Pre-foreclosure is also the most crucial time in the foreclosure process. It is during this period that you as an investor stand to make the largest profits and can literally make thousands of dollars in months, weeks, days, or even hours!

The key to pre-foreclosure houses is equity. Simply put, equity is the difference between what a house will sell for (fair market value) and what is owed on the house. The whole concept to making money with pre-foreclosures is to buy a house for less than fair market valuing, thus immediately creating equity for yourself.

Here is an example of how this can work. Let's say someone owns a house with a fair market value of $200,000. Now let's assume that this homeowner has lived in the house for several years. If you consider that the property has most likely increased in value over time, while at the same time the homeowner has been paying down the mortgage on a monthly basis, it is fair to assume they owe less than $200,000 on the property.

For this example let's assume that the homeowner owes $160,000. This means there is $40,000 in equity in the house. As an investor, you would want to buy the house for $160,000 or slightly higher. If you can do this, you have a shot at making $40,000.

I know what you are thinking. Why would they sell the house for $40,000 under the market value? Right? Here is one reason why. If they sell the house to you, you can promise them a quick closing, thus stopping the foreclosure (losing the house at auction).

This will prevent a foreclosure from going on the homeowner's credit record. A foreclosure can stay on someone's credit for seven to ten years making it next to impossible to get another mortgage in the future. This is just one of many reasons.

So let's say they sell the house to you for $160,000. You can turn around and put the house back on the market for the $200,000 that it is worth. Once the home sells, you could put a whopping $40,000 in your pocket. Sounds pretty nice, huh? The best thing is there are ways to make similar deals with little or no money! And that is an example of how you can make money with pre-foreclosure houses.

In order to buy pre-foreclosure houses you first need pre-foreclosure leads. This is how you are going to get your leads. You are going to implement a powerful direct marketing campaign soliciting those who are in pre-foreclosure. How do you learn where to start looking?

One of the most valuable sources for pre-foreclosure leads is mortgage brokers. Almost everyone knows a mortgage broker. Maybe your brother is a mortgage broker. Maybe a good friend is a mortgage broker.

If you don't know anyone in the mortgage business, network a little bit. I am confident you will be introduced to someone in the mortgage field that can help you.

If not, that is OK too! You will just have to do a little more legwork. Go through the yellow pages and look for mortgage companies. Start calling around and introducing yourself. See if you can talk to the manager. If not ask to speak to a loan officer.

Ask them if they have someone in particular that handles foreclosure financing. They may or may not. Often times in mortgage companies, they will receive large volumes of calls from distressed homeowners.

These are homeowners who are trying everything to stop foreclosure. Most of the time, it is too late for the mortgage company to help the homeowner because their credit is already shot. At this point the mortgage company may refer them to what is sometimes call a hard money lender. A hard money lender is a lender that specializes in high risk loans. Often times, they are private investors.

This is where you come in. These leads are invaluable. They are homeowners that are exhausting their last options to save their home. What you do is have the mortgage company start to refer these deals to you. If you can get the names and phone numbers of these homeowners, you can contact them directly. More importantly, you can contact them when they are open to listening and expecting your call. If the mortgage representative that can't help them gives a high recommendation of you to the homeowner, they will be excited to hear from you.

About The Author:
Jeffrey Ringold is the author of 'How To Build A Massive Fortune Through Real Estate Foreclosures'. He is a licensed real estate agent and investor who has bought or sold over $12 million in real estate over his 7 year career. He is consulted by leading real estate developers and investors almost daily.

For more information on real estate investing and foreclosures, visit his web site at: www.MassiveForeclosureProfits.com

Free Book

Order the freshest leads from any Default Research county for six or more months and receive a free copy of, "The Pre-Foreclosure Real Estate Handbook: Insider Secrets to Locating and Purchasing Pre-Foreclosed Properties in Any Market.

Be sure to check out the forward in the free book written by Default Research President/CEO Serdar Bankaci. Again, to get your free copy, order any county for six months. To order please call 888-211-8396

What is the MOST IMPORTANT MOMENT in a real estate investor's life? It is the 30 to 60 minutes you are with a potential seller trying to get them to sell at a 20% to 50% discount to their homes value!

"Imagine Being Able to Consistently Get Seller's To Sell At A 20% to 50% Discount!"

Wonder if this is possible? It is if you are totally prepared and have a well- done professional presentation during that critical moment.

Get More Information