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A Different Way to Look at Foreclosure

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By : Karim El Sheikh    99 or more times read
Foreclosure can be a devastating process. Having to leave your home has many disadvantages and there is also a societal stigma that is often attached to the event. However, most people rebound from this event quite well, and there are some short-term advantages that can make the whole process seem better for all.

  1. Money. People that are facing foreclosure, who stop paying their mortgage payment, now have more money in their pockets. Many people, tricked by unscrupulous lenders, found the adjustments on their mortgages to be too much to handle. They are still employed; they just can’t make ends meet. Aside from foreclosures that have occurred from loss of employment, people that simply cannot afford to pay their mortgage anymore now have that mortgage money available each month.

    What does this mean? This means that these people are taking advantage of this extra cash and saving it to move into affordable housing. It also means that they are paying down their other debts.

    The top two credit card collection companies have seen their stock rise 300-500% since mid 2009. These collection companies have been able to collect on bad debts much easier since the foreclosure crisis has begun. People are paying off their credit card debts with the money they were using to pay for their high mortgages. This is good for all parties involved.

  2. Investment. Investors will find that they can purchase foreclosure properties for incredibly low prices. Many have found homes available for 10% of what the initial selling price for the property was. Banks are desperate to move these properties off of their books and will do whatever it takes to make a sale. This is a great way for someone to make some serious profit and to get the economy rolling again.

    When a home is purchased cheap, repaired and renewed, it can be resold at a profit with very little effort, and at a lower price. When homes are affordably priced, more people will consider making the purchase. The cycle is good for all involved.

    However, investors must consider the fact that most of these homes will need repairs. Most home owners have not been investing into repairs and the banks are only selling them “as-is”, no guarantee implied. If you are not afraid of getting your hands dirty, this is an opportune way to make a large profit.

  3. Free Rent. While this is not a promotion to stop paying your mortgage, if you stop paying your loan payments you will have anywhere between 4 and 24 months to live in your home before you must move. While this should not, in any way, be an incentive, it should be a form of relief for those facing financial difficulties. This delay in eviction will allow you to save the money needed to move out of the property. Finding an apartment may be difficult when your credit reflects a foreclosure. Taking this delay time to save the money and move before it is on your record is an advantage you cannot ignore.

  4. Decreased Unemployment. This advantage is a little hard to grasp, and is not as immediate as the other benefits, but nonetheless, it is an advantage. The process is simple: when you have a work force that is not tied to the area in which they live, the employee will follow the work. When employers have a larger supply of employees to select from, they increase their offerings. It is supply and demand. However, with unemployment hovering near 10% there is currently ample supply of people looking for work. When the economy begins to improve, this advantage will rise to the top of the list of advantages.

  5. Bank Regulations. Face it, most of the foreclosure nightmare falls back to lenders making inappropriate loans, followed by banks making inappropriate foreclosures. There has been scandal after scandal of foreclosure performed by institutions that were not entitled to foreclose, lost mortgages, mortgages filed improperly and the list continues. The banks have already had a self imposed moratorium on foreclosed homes to try and straighten out the mess. While they have begun foreclosing again, it is at a much slower rate.

    The fiasco that has ensued from the banks mishandling of every step of the foreclosure process will lead to regulations that discourage this type of behavior again – a benefit to every consumer.

While this list may seem a bit off-handed, because a person loosing their home can never be good, it is also is making a point: You have to find some good in a situation if you are going to survive. has the most-up-to date database of foreclosures, preforeclosure, bankruptcy, and short sale listings.

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