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The real estate market is like many other markets where it fluctuates up and down.
Sometimes the housing market becomes a seller’s market when there are many buyers and the seller has the upper hand so to speak where he or she waits for the highest bidder to pay for the house.
And there are times when the buyer has the upper hand because there are too many home loan borrowers who for whatever reason can not make monthly payments any longer.
While this is an unfortunate situation for a homeowner, it is not, however, for you who are planning on buying foreclosure.
Before you think of buying foreclosure you want to know where to look for them. So the more sources you have the more choices you can get.
Many lenders, whether it is a bank, mortgage company, or others, want to sell foreclosure as quick as possible because this asset is considered a nonperforming asset which basically means that the lender is not receiving monthly payments from the defaulted borrower.
So this brings us to…
Sources of foreclosures
1) Mortgage Companies
The terms “private mortgage companies” and “private companies” are interchangeable but let’s stick with the latter term because it is used widely.
This might surprise you, but mortgage companies account for at least selling half of the home mortgage share in the housing market and that is their specialty business, selling home mortgages.
Many of these companies have regional or local divisions and these local divisions have Real Estate Owned Sections (REO) who are in charge of selling foreclosures for the lender.
Find the phone number or email the office and let them know about your interest of buying foreclosure and to include your name in their investors’ list as well.
Another way that is less common but as effective is to visit your city courthouse and look for the mortgage foreclosures records and find out who the lender is who usually has an address, phone numbers, fax numbers, or email address in the records.
In our present time many lenders use the internet to list their foreclosures under the name Real Estate Owned like LendingTree, Countrywide, and so on.
2) Banks
Even though banks are traditionally not primarily specialized in mortgage loans like mortgage companies, but that is no longer true and they are competing with others in the housing market.
You can call your local or national banks like Bank Of America or Wells Fargo for example and ask for the Real Estate Owned Department and find out about their foreclosures list.
Tell them that you are interested in buying foreclosure and what is the next step for you to do. Like mortgage companies the bank can include your name in their list and send you an email, regular mail, fax, or phone call notification.
Many of the larger and smaller banks post their foreclosure list or REO properties on their websites which can make it more convenient for you.
Nevertheless, be more active and visit your local banks whenever possible and create business relationships as it can enhance your image as an foreclosure investor.
3) Credit Unions
Credit unions are similar to banks with few differences. For example, only some members who belong to particular organizations can belong to credit unions such as government departments, universities, or religious organizations. Another major difference from banks is that they are exempted from federal tax.
And because they provide home loans, some of these loans become defaulted and foreclosures become reality. Any like other lenders they want to get rid of these foreclosures as soon as possible.
Find out the locations and other contact information in your area and contact the REO office and explain your interest about buying foreclosure. Bear in mind that the credit union is relatively small compared to commercial banks so it is a good idea to have a list of more than one.
4) Insurance Companies
For many readers that might be another surprise to recognize insurance companies are also invest in real estate properties and not solely provide insurance.
They are more focused on commercial properties rather than the traditional single houses.
Examples of properties they usually invest in are like,
1- Commercial buildings,
2- Shopping stores,
3- Restaurants, and
4- Complex residential properties.
Insurance companies like other lenders also have local or regional branches where you can call to find out about their REO department.
Getting in the business of buying foreclosure is something can be very profitable and like other legitimate businesses it takes a fair amount of time and effort as you start to be good at it and the more you research about it the better you get at it.
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Home Mortgages and Loans
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