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Last Updated: May 14th, 2012 - 22:24:01 |
The number of homes in foreclosure across the country is on the rise. The economy is changing. People that are not able to adapt with the evolution of technology, will be left jobless. This change is compounded by the fact that the average savings of an American household is not sufficient enough to help if a catastrophic event were to occur. In other words, the average American does not have the recommended amount of savings in the bank to support them in the event of a job loss, an injury, the sickness or death of an immediate family member, or personal illness that results in extended time off work. Any of these variables, alone or combined, creates a climate that is conducive to foreclosures.
The mortgage business compounds this problem. Potential homebuyers are now able to get into a home with little or no money down. It is completely possible for someone to put none of their own money down on the purchase of a new home. Compared to twenty years ago when people were consistently putting 20% down to purchase a new home. Individuals who do not have capitol invested in their home have a much higher chance of going into default.
These variables have put banks, and other lending institutions, in an awkward situation. Do they decrease the amount of money they lend, stop lending money altogether, or do they take on the additional risk of lending to individuals who have little or no money invested in their own home?
Even if a person does the have capitol to put down on their home, are consistently making payments and have built up equity in the home, banks are swarming to lend them more and more funds. Sometimes up to 125% of the value of the home, knowing without a shadow of doubt, that if they were to foreclose on the loan that they would loose money. In fact, to counteract these issues, banks have created entire departments set aside to mitigate this type of loss.
So here we are, in an era where people are saving less and less, banks are lending more and more (100 to 125% LTV, or Loan To Value, of the home), and the world economy is changing the job market. These ingredients when put together lead to one outcome¡foreclosure. Foreclosures are on the rise and the insider¡¯s within the industry do not foresee an end to the trend. So how do you as an investor position yourself to provide a beneficial relationship to the bank who is going to loose some of their capitol, and the homeowner who is going to loose their good credit? The answer is quite simple. As an investor, you position yourself in the middle of the market, make yourself known to both homeowners and the banks through strategic marketing, and arm yourself with the knowledge to solve these problems. If you are able to solve these problems you will be rewarded handsomely in the form of huge checks!
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Graham Treakle is an ex-banker turned Short Sale Pro and teaches investors how to increase their real estate profits by negotiating successful short sales. To learn more insider secrets as to why banks accept short sales, visit us on the web at www.MyInvestorLink.com .
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