Big Ben!

Is the Federal Reserve Chairman Ben Bernanke a big genius or making big mistake after big mistake? Whatever side of the political or economic side you fall on might color what you think of Mr. Bernanke. I certainly have my views on what he is doing, which I will keep to myself, but what I did share this month with the media is that the rate cuts issued by Bernanke and the Fed are a good thing for everybody involved in the foreclosure process. From the investor to the banks to the families — everybody wins with the rate cuts.

Those interest rates, combined with the Default Research lists and your continuing education, are going to mean profit in your pocket. This month I have written a piece on why the pre-foreclosure step is the best time to invest in a property. Our good friend at Robbins & Lloyd Mortgage in New York City, Shane Backer, has an interesting piece on jumbo loans and how the rate cuts are going to benefit Default Research clients. Finally, a new feature — a top ten list; this month's topic is the top ten places in America to invest. I gave my thoughts; we hope to hear yours too!

Good luck to everyone this month — while the country has fallen on hard times in terms of foreclosures, the government is offering a band aid and, with the fresh Default Research lists and your energy, we can help ease the pain.

Find Diamonds at the Pre-Foreclosure Stage!

As we all know, or are learning quickly, there are three stages in which foreclosures can be purchased. The first is pre foreclosure, second is foreclosure auction, and finally there are real estate owned (REO) or bank owned homes. This is basic knowledge in the foreclosure business; what is not part of the elementary education is knowing where to find the best deals!

Although deals may be found in all three stages, I know that you will find the true "diamond in the rough" in the pre foreclosure stage. Why? Well, generally investors begin looking at properties in the pre-foreclosure stage and, as properties move through the three stages, the best deals are usually "dug up" by investors and purchased.

Now I know that buying a property before your competition is not always as easy at it sounds. Buying at auction can be tricky because you are unable to inspect the property before you purchase. This obviously increases your risk when making a purchase. Without the ability to inspect the home, the buyer is at a disadvantage of not knowing what exactly he or she is purchasing. The second major disadvantage to buying at auction is that an investor usually has to have cash in hand at the time of the auction; sometimes not an easy task. So, you decide you are not a risk taker and you opt to buy REO properties which can be safer because they are inspected and financed in a traditional manner. That is fine. But remember that, since these properties have made it all the way to the REO stage, they usually don't offer a very high potential for profit and therefore you are not investing in a real diamond!

Back to square one -- buying pre foreclosure is where the real deals are found. By getting in at the initial stage, which can be done with Default Research's most up-to-date foreclosure lists, you can be the first to look at properties in financial distress. Through our research, we are finding that nearly 20 percent of distressed homeowners are not even living in their homes. What an excellent opportunity that would be for an investor to purchase the home for below market value and save the homeowner from going through the embarrassing foreclosure proceedings. Also, banks are more likely to negotiate down loan balances as the foreclosure process can be quite expensive. Keep your costs down, put profit in your pocket, and go digging at www.defaultresearch.com and find your diamond!

How Can New Conforming Loan Limits Affect You?

©Shane Backer 2007

New conforming loan limits will soon increase from $417,000 to $725,000 in most high-cost states. The House, Senate and Bush administration have signed off on a bill labeled the Economic Stimulus Package (the ESP), which includes raising the conforming loan and FHA loan limits. As a reader and Default Research subscriber, you are probably wondering how this might help you as a buyer and seller of foreclosures. Whether you currently buy foreclosures above or below the $417,000 limit, the ESP is great news.

To explain: Any home loan of more than $417,000 is currently considered a jumbo loan. The rates on jumbo loans are typically 1 to 1.5% higher than rates for conforming loans (those below $417,000). The ESP raises the limit for conforming loans, which carry a lower interest rate. Let's say you just bought a $500,000 foreclosure, for which you are trying to find a buyer. With the old conforming loan limits, a buyer would typically get an interest rate on a 30 year fixed jumbo loan of about 7.25%. Now, the same loan might carry an interest rate of 6%, generating a lower payment. So it will be easier for you to market and sell the property.

Even if you specialize in foreclosures under $417,000, the ESP can help you since the bill also raises the FHA loan limits. FHA loans are for people with poorer credit who can't traditionally qualify via the conforming guide lines. The FHA loan limits in most states are very low, sometimes as low as $250,000. The ESP raises these limits. So, if you are correctly buying lower-end foreclosures, you'll be able to take advantage of this increase.

If you specialize in high-end foreclosures, the benefits from the conforming loan limits increase can be huge. Let's say you're buying a $700,000 property, which would have generated a 30 year fixed jumbo loan at around 7.25%, with a payment of $4,657 amortized over 30 years. With a conforming loan rate of 6%, the payment would be $4,196, saving $461 a month. This means you could afford more house since the buyer of your foreclosure would get the same benefits.

It's easy to see how hugely you can benefit from the new mortgage limits. To calculate a specific scenario, use one of the great calculators on www.newmortgagelimits.com.

Naturally, to make this system work, you will need a ready source of mortgage money and a broker who thoroughly understands the strategies. As a Senior Loan Specialist, I am well-positioned to help you navigate the foreclosure market from the financial end. I welcome your questions and look forward to working with you.

Shane Backer
Branch Manager-Senior Loan Officer
Robbins & Lloyd Mortgage
347 Fifth Avenue Suite 1506
New York, NY 10016
Office: 212.213.5120 X3008
Fax: 212.202.4396
Email: ShaneB@robbinslloydny.com
Web:http://www.ezmortgagedirect.com

S. California Foreclosures Increase 433 Percent in Jan 2008

Los Angeles County Has Nearly 10,000 Foreclosures

Default Research, the premier provider of foreclosure real estate data in Southern California, is reporting that Notice of Defaults and Notice of Trustee Sales in Los Angeles and San Diego counties are up approximately 250 percent in the first month of 2008.

According to Default Research (www.defaultresearch.com), Riverside County was the hardest hit in Southern California in January 2008 with 8,554 new foreclosures. Riverside County also has a greater than average unemployment rate at 6.2 compared with the rest of California. The high foreclosure and unemployment rates coupled with a median home value of 334,000 in Riverside, 415,000 below the state average, has made for a tough start in the new year.

"The word recession has been all over the news for the past few weeks and it is vibrating off the mountains in several California counties," said Serdar Bankaci, founder of Default Research. "Southern California foreclosures will continue to rise as more adjustable rate mortgages (ARMs) reset and people are unable to make their payments. Combine that with declining home values, the rising unemployment rate and the economic slowdown, and there are sure to be more foreclosures in the coming months."

Concerns about a recession prompted elected officials in Washington, D.C. to take quick action and lower the interest rates. Default Research, which has a majority of its clients in California and is the provider of the most current and accurate database of foreclosed properties in Southern California, sees this interest rate reduction as a huge win for every one of its clients in the Golden State and across the country.

"With the new lower interest rates, foreclosure real estate is an even better investment vehicle for those who want to profit and, at the same time, to help families in financial trouble," said Bankaci, who believes foreclosure real estate is an excellent opportunity to buy properties, rent them and quickly earn a monthly return on the investment. "Mortgage brokers using our lists will be able to refinance homebuyers into lower fixed rate loans. Investors win, too, because banks are approving loans more readily now that the interest rates have been reduced. This allows investors the credit they need to make purchases in the pre foreclosure market place. Not to be forgotten — the homebuyers have the same advantage with more credit available to make purchases."

South Florida Foreclosures Increase Nearly 200 Percent in January 2008

Miami-Dade and West Palm Beach Counties see 2158 Foreclosures

Default Research, the premier provider of lis pendens data in South Florida, is reporting that Florida foreclosures are up 198 percent in the first month of 2008.

According to Default Research (www.defaultresearch.com), Broward and Miami-Dade had the largest increases in foreclosures last month with 1,888 and 1,236 respectively. The cities of Mirmar and West Palm Beach could not escape the crisis in the Sunshine State with 245 and 293 foreclosures listed.

"2008 started the exact same way 2007 ended in South Florida with our bank foreclosure list increasing," said Serdar Bankaci, founder of Default Research. "With the influx of speculative investing that took place in South Florida over the last few years, it is no surprise that foreclosures are high. In addition, South Florida is the premier location for second homes, and most multiple home owners will let their second residence go into foreclosure before their primary home."

Last year Default Research, which lists foreclosure sales two to three weeks ahead of the competition, saw an average of about 220 foreclosures daily in their extensive coverage area in Florida. According to Bankaci, indicators in the past ninety days show that median home prices are continuing to decline and inventories are increasing.

The word recession is causing coast-to-coast reaction and action from officials in Washington, D.C. who recently lowered the interest rates again. Default Research, whose Florida client base is its second largest, is the provider of the most current, accurate lists of foreclosed properties in South Florida. The company thinks the new interest rates are a sure win for each of its clients in that area and across the country.

"With the new lower interest rates, foreclosure real estate is an even better investment vehicle for those who want to profit and, at the same time, to help families in financial trouble," said Bankaci, who believes foreclosure real estate is an excellent opportunity to buy properties, rent them and quickly earn a monthly return on the investment. "Mortgage brokers using our lists will be able to refinance homebuyers into lower fixed rate loans. Investors win, too, because banks are approving loans more readily now that the interest rates have been reduced. This allows investors the credit they need to make purchases in the pre foreclosure market place. Not to be forgotten — the homebuyers have the same advantage with more credit available to make purchases."

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

Top 10 Areas For Foreclosure Investing

One of the most common questions I discuss with customers on my Facebook page is what is the best market in which to invest? Of course it depends on the investor, but I consider those areas that have the lowest loan-to-value (LTV) to be the more profitable markets. My theory is that the lower the LTV, the more equity in the home. Of the top ten seven are counties in Florida, including Miami-Dade, Broward and Palm Beach. Drum roll please...

Top Ten

1. Miami-Dade
2. Snohomish
3. Palm Beach
4. Anne Arundel
5. Broward
6. Pima
7. Duval
8. St. Johns
9. Hillsborough
10. Clay

The counties with the highest LTV's and least amount of equity included the Detroit metro region along with Montgomery County, Maryland. These areas may be a little more competitive, but with Default Research's fresh listings and our client's clear advantage over their competition, there are plenty of profitable properties available.

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.

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