Causes and Consequences of the

Foreclosure Crisis

A look at the effects of the 2007 collapse of the banking and housing industries.

Housing or Real Estate Bubble – Definition

• Real property which rapidly

increases to the point that

unsustainable debt levels are

reached relative to

expendable income as well

as other affordability

indicators within the economy

• Housing bubbles are created when fast

paced growth in the housing market goes

unchecked and spirals out of control

• Factors include lenient and predatory

lending, extremely low adjustable interest

rates and a blinding speculative fever

• Housing bubbles are generally

undetectable until after the burst

Housing Bubbles – How They Form

Reasons For The 2007 Burst and Recession

• Adjustable interest rates

reset to higher levels

• In 2007, 1.3 million

subprime borrowers

defaulted on mortgages and

were submitted through the

foreclosure process

The Domino Effect

• High adjustable interest rates

• Millions of foreclosed homes

• Decline in home demand and home value

• Housing industry jobs were lost

• Jobs connected to housing industry jobs

were lost, etc

The Domino Effect

• Prime mortgage holders defaulted

• Banks accumulated more foreclosures

than they could move, compounding

the mortgage crisis

• Shareholders and investors panicked

• Lending was basically brought to a

standstill, etc

• The Housing and

Economic

Recovery Act of

2008

Government Response

Government Response

• The Homeowners

Affordability and

Stability Plan

Foreclosure Help

• Talk directly with

the lending

institution

• Talk to a HUD

approved foreclosure

avoidance counselor

Foreclosure Help

Foreclosure Help

• Seek out state and

local foreclosure

assistance

resources

Foreclosure Help

• Contact HOPE

NOW which is an

alliance of HUD

affiliated

Intermediaries

Foreclosure Help

• Contact The

Homeownership

Preservation

Foundation which is

also affiliated with

HUD and provides

foreclosure

counseling and help

Foreclosures As An Investment

• Low-cost real estate

foreclosures abound

• Millions of foreclosed

properties sit with a

flooded banking industry

Foreclosures As An Investment

• Every day, tens of

thousands of homes are

being repossessed

• Foreclosure properties

are being sold for 50% or

less of their actual value

• Short Sales

• Negotiate with

banks on

behalf of

distressed

homeowners

Foreclosure Investment Opportunities

Foreclosure Investment Opportunities

• Public Auctions

• Bid against other

competitors for

foreclosed

properties

• Foreclosure

Listing Services

• Normally found

online

• Get the jump on

other investors

Foreclosure Investment Opportunities

• Browse listings,

photos and info

• Resources so you

can invest with

confidence

Foreclosure Investment Opportunities

For more Information:

http://twitter.com/fcdeals http://www.foreclosuredeals.com/wp/feed/ http://www.linkedin.com/company/foreclosure-deals

http://www.facebook.com/ForeclosureDeals

http://www.foreclosuredeals.com/