It is clear during this time of the year that interest rates are once again continuing to rise and along with these rates foreclosure amounts are going through the roof.
Foreclosures are well into the millions this year and are expected to be 53% higher by year end than last years numbers.
There are many businesses focused around the foreclosure industry including real estate investors, loss mitigation specialist and also field preservation contractors.
While foreclosure numbers rising is sad morally and detrimental to the economy, businesses relating to the ones previously mentioned will also help balance out the economical status.
The field & mortgage preservation industry is one that has suffered many devastating blows over the past four to five years. During the housing boom foreclosures were way down and property values and deal making were running high, so naturally many of those that make their living in mortgage preservation went out of business.
Basically field preservation specialist come into foreclosed properties and maintain the property value by removing debris, cleaning the inside of the property thoroughly and also handling landscaping functions to ensure that the property can quickly be resold for maximum value by banks, mortgage companies or Real Estate Management Firms.
Another business that’s quickly coming into high demand is Loss Mitigation and Foreclosure Prevention Services. Basically these professionals come in and negotiate on behalf of the property owners who are in danger of losing their properties to foreclosure.
These professionals are well trained on industry laws and loop holes and they work out payment plans for the residents with their banks and mortgage companies and then are paid a fee by the homeowners for their professional service and advice.
While the industry and economy is suffering a harsh gut check in the areas of real estate and mortgaging, these industry will soon bounce back strong.
Cyclical markets like real estate have moments where they are exploding to degrees that are record breaking and then they hit rock bottom a couple of years later, then the whole process will repeat itself over again.
When the housing market recovers it will be highly important for sneaky mortgage brokers to avoid putting clients into properties that they are truly unable to afford, with long grace periods before initial interest payments, inflated interest rates and dangerous Adjustable Rate Mortgage Clauses (ARMS) or else the American Housing Market will quickly return to a similar state.
In the meantime real estate investors who focus on foreclosures and other professional businesses and entrepreneurs who are in a service industry relating to the lost home market are banking in with high profits!
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Yeah, this is true. My brother is into mortgages and he speaks about this all the time. But from what I understand, there are certain cities in America such as NYC, SF, Houston, ect… that you can basically purchase homes during any period and you are almost certainly going to make money in
the long-run; is that true? Awesome, article!!
Thanks for your comment David. Your brother has a good point, but I think overall you still have to be picky on what kind of real estate deals you pursue regardless of the area, because it’s real easy to lose your rear-end.
But I think what your brother is saying is very true, because if you hold a property long enough the market will go in cycles and you can make money eventually if you ride the tide out and wait for values to rise, which is the case in places like NYC,SF and areas in FL, prices continue to go up.
Also in CA and NY the housing markets generally are very good because of the high cost of property values, you can buy a distressed property, do rehabs and make six figures on one deal in some cases, especially before the real estate bubble took place!
But in an area like KY where the property values are much lower, you may do a rehad project and be lucky to make 20-30K, but the risk isn’t as high as it would be investing in these high cost areas.
It’s kind of like stock market investing, investing in very risky and speculative investments usually gives you the chance to make more money, like options give higher returns than mutual funds, but are a lot more risky. Thanks again for the comments my man.
Good article…I tell you the California market or I wshould say the Southern California market has sure slowed down in recent months. Foreclosure rate has been steadily rising. On my street alone there are three houses that have been up for sale for six months. This was unheard of a year and a half ago when houses would sell the same dayt hey were listed! The market has changed and it is unfortunate that people are losing their houses. But you are right for the investor now is a good time to buy in many areas. It is cyclical and will recover in time.
One thing you did not mention is buying foreclosure properties and then renting them using a buy and hold stratgey until the market goes back up. Sure you can rehab and sell for an instant profit but most professionals state that the real profits are in the buy and hold market.
just a though
Sam