"Short Sales: A SAFE PLACE To Be During The Coming Real Estate Blood-Bath"

Let's face it: Nobody can predict the future of real estate prices, but many people agree that parts of the United States are due for some significant price declines after the irrational appreciation of the late 90's and early 2000's. Indeed, this has already begun to happen in some of the areas of the United States.

Additionally, mortgage lending guidelines have been so profoundly lax in recent years that many borrowers who were unqualified by any reasonable lending standard have acquired variable rate mortgages that they could pay while rates were low, but as interest rates rise, those variable rate mortgages are now returning to "bite" these unqualified buyers.

Where does this leave short sellers? In a very nice position. You see, as property values decline and mortgage foreclosures increase, lenders are going to be under significant pressure to relieve their inventories of bad loans in order to get their money re-circulated into performing assets (non-defaulted loans).

As you probably know, mortgage foreclosures are at historically high levels already. And as more geographical regions of the United States begin to experience severe price contractions in the real estate market, lenders will be more and more open to alternative solutions to relieve their immediate stress...and short sales will be a common solution to their problem.

Frankly, the situation that seems to be developing in the real estate market is reminiscent of the real estate collapse for which the U.S. government created the Resolution Trust Corporation. The Savings & Loan crisis of the 80's left such a huge supply of non-performing mortgage loans that the US Government had to step in and assist with the disposition of those non-performing assets to other entities that could handle them. And that's when savvy real estate investors made a fortune.

Investors were able to benefit by purchasing property directly from the RTC at severely reduced prices - a type of short sale for that time period. And as market conditions in various parts of the country return to similar circumstances that prompted the formation of the RTC, savvy investors will have increasing opportunities to buy real estate at extraordinarily reduced prices through short sales.

But why is in the best interest of a lender to sometimes take a huge loss on a mortgage loan instead of foreclosing it?

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Foreclosures Are On The Rise

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"Every repossessed home is a broken American dream for families, who lose not only money and a home, but also give up years of happy memories and hopes for a solid future."

In an article for The Detroit News, Brian O'Connor discusses the record foreclosures in Wayne County, Michigan. In January 2006 alone, there were 3,364 foreclosure. That's more than any other county in the nation by more than 1,000, according to some statistics. And while Wayne County sets the bar high, foreclosures are also up throughout the state.

Foreclosures certainly take their toll on the families who live through them, but they also affect the lenders and the community at large. "Lenders, stuck with the homes, lose up to $50,000 per house as they clear them out at below-market prices." There are many factors that contribute to the rise in foreclosures: job-loss, poor economic situations, adjustable mortgages, and other aggressive lending practices by mortgage brokers. Personal problems such as divorce or illness also cause homeowners to default on their loans.

One man profiled in this article once owned his home free and clear. While separated from his wife, he took out a 30-year mortgage on the home, but fell behind in payments. "He refinanced to a sub-prime loan charging 13 percent interest. But he had fallen behind on taxes, too, and now owes more than $64,000 to the lender, including $16,000 for taxes. Although he's declared bankruptcy, the home was excluded." His payment jumped from $500 a month to $2200 a month.

Situations like this man's happen across the county every day. But foreclosure doesn't have to be the answer. To learn more, visit our website at www.FreeShortSaleSecrets.com

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What Is A Short Sale?

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"What Is A Short Sale - And How Can A 'Normal' Person Put $100,000 or More In Their Pocket During The Next 12 Months Using A Step-by-Step Blueprint?"

We recently closed on a property with no money out of our pocket. We also didn't get a mortgage or use a private lender. Yet we still made a profit of over $28,000 on the deal. How did we do it?

The home owner was a couple who was getting a divorce and both had relocated out of town. They were willing to do whatever it took to keep the house from foreclosure. I started the negotiations with the bank at $120,000 dollars on a property where the bank had a mortgage against the property for $170,000. My offer was $50,000 less than the debt against the property. And that's what short sales are all about - convincing a bank to take less money than they're actually owed against a property, so that the lender doesn't have to complete the foreclosure, rehab and resale process themselves.

The lender countered at $158,000. Even that would have been a discount of $12,000 off of the debt that they were owed, but ultimately I got an approval letter at $145,000 - which was a full $25,000 discount off of their mortgage.

And in less than a week thereafter, we bought the house, resold it, and put a check in the bank for more than $28,000. We didn't spend a dime on the property. We didn't cut the grass, pay a light bill, or make any repairs (even though the property needed some fix-up). This means that the cash-on-cash return was INFINITE. No money invested, but $28,000 realized as profit. Not a bad return rate, wouldn't you say?

What is a Short Sale? A Short Sale is a program the banks have created to satisfy a need for them to liquidate their assets to increase their lending power. They do this by accepting less than the full amount owed on some mortgages which have fallen into default.

Short Sales can be wildly profitable. Our first year in this business, even with mistakes and all, we experienced over $400,000 in profit from short sales alone. It's a very lucrative business.
I know what your thinking - “That is a once in a lifetime deal and it cannot be repeated over and over.” I used to think this too. I used to say “He is in a better market,” “She has a better system than we do,” “This does not work where I live”.

LISTEN, LISTEN, LISTEN. I am living proof that $100,000 in a year is more than attainable for the average person. That is about a ¼ of what we made our first 12 months in the business!
The saying goes “If you believe you can or cannot you are probably right.”

How To Buy Pre Foreclosures

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