Mortgage delinquencies have risen exponentially in the last three years. In fact, the delinquency rate seems to be accelerating rather than slowing.
Federal Reserve Board Delinquency Rates - Q2 2009
This indicates we should expect more foreclosures. In fact, the increase in delinquencies far out-strips the banks ability to deal with the situation - both in terms of loan modifications as well as in terms of flushing out REOs. This can only mean that a large backlog of properties is being created.
When these properties come out the other end as OREs or REOs they present opportunities.
The first opportunity is that the lenders generally want these assets off their books as quickly as possible and will readily take less than the appraised value. (However, they do have hard, internal guidelines, so don't expect to simply steal the property.)
The second opportunity is that many properties will be the victim of their prior owner's frustrations. They will be the worse for wear. These provide excellent properties for fix-and-flip to the appropriate investor as these tend to be more deeply discounted than the damage. Often a dog of a property, in the eyes of an owner occupant, can with little effort become a cherry. Remember, with the heavy crack-down on credit, most homebuyers no longer have access to an equity line to perform all their desired repairs, they need a home that is move-in ready.
The best way to find these properties are to use the http://www.FinestExpert.com financial criteria search. Easily find properties that are listed at 65-cents on the dollar, by looking for a 35% discount. If you want to know all properties currently and soon to be available, set the property type to include pre-foreclosures. If you only want to know what is available today, then set the property type to only include Traditional and REOs
