7 Reasons Why Foreclosures Occur

In the real estate market, knowledge is definitely POWER - and The Secret to Profits! Therefore, it's important for investors to understand exactly what pre-foreclosures are and what opportunities are available to you. What Are Foreclosures and Pre-Foreclosures?

A foreclosure is a legal process. It's initiated by lenders when home owners (and others) fail to meet their mortgage obligations. In other words, home owners fail to meet their payments and, as a result, lenders want the property back. The foreclosure process starts when a lender files a law suit or a notice of default (more on this topic later) in the official public records. We'll cover this process in more detail in the next chapter.

A pre-foreclosure sale takes place between the time when the lender files suit and when the property is scheduled to be sold at a public foreclosure action or a trustee's sale. A pre-foreclosure is not a formal legal process; it's an opportunity for you to assist stressed-out home owners and make a profit at the same time. So Why Do Foreclosures Occur?

Often, people tend to think that foreclosures occur because of poor financial management by home owners and others. While this certainly can be true, there are really many different reasons why foreclosures take place. It's important for you to understand these reasons so you can deal effectively with home owners facing foreclosure and help them to make the best of a bad situation.