Distressed homes sales, which include foreclosures and short sales, have continued to account for a large percentage of the total home sales. It is not surprising, simply because given a choice of buying a cheaper home, a buyer would most likely pick the one which offers him more savings and return potential.

It Is Always About the Location

Ask any seasoned real estate investor and you will be advised the same thing when it comes to finding the perfect property to buy —- choose the right location. Considering the current housing situation, you would want to look at states or cities hit hardest by the mortgage mess, but are already on the brink of a housing pop. There usually lie the sweetest deals.

For example, a breakdown of the total California home sales for the month of June showed 35 percent involved foreclosed homes while 17.6 percent were short sale transactions. Median sales price declined from $270,000 recorded in June 2010 to $253,000. From these figures, it is clear distressed homes are generating much buyer interest, which should not be surprising, considering California has always been a favorite among investors for its beaches and laid back lifestyle.

So, if you are looking to find the best deals, simply go where there is a huge inventory of distressed houses for sale.

Going Around the Tight Lending Requirements

Home buyers and investors with enough cash to pay for a distressed home are lucky since they will not have any problems dealing with the tighter lending requirements being imposed of late. But if you are like most buyers who will need to apply for a mortgage loan, you might find it more challenging than before.

What you can do is to make sure your credit score is high enough and you have an impeccable credit history. All your financial documents should also be in order and ready for submission. You should also have enough money for a 20 percent down payment, which most lenders require nowadays.

It is indeed a lot of hard work. But you can always think about the considerable profit you stand to gain if the purchase is successful. That alone should keep you motivated.

Due to the increase in the foreclosure option, banks are adding to their books many of these foreclosure properties that in business terms are identified as bad debts. The normal practice of these financial lenders is to try and get rid of these foreclosure properties as soon as possible so that they could cut their losses and keep their books in a clean slate.

For getting rid of these foreclosure properties the banks place out advertisements informing the public about the sale of these foreclosure properties hoping to achieve buyers. If the properties have no takers at this stage then the banks sought out to other methods of getting rid of the foreclosure properties. One such mode is at foreclosure auctions, where these foreclosure properties go for a fraction of the market price.

Nowadays many investors and genuine buyers have understood the mechanism of acquiring foreclosed properties at the best possible price. They fully know that not many individuals are ready to take up these foreclosure properties and that to with full payment upfront. Today with banks literally auctioning these foreclosure properties at throw away prices the real estate tycoons are making a killing of it. They try and achieve these properties at a very low price, do some adjustments that are required to the foreclosure properties and later sell them off for a fantastic price earning a massive profit in the bargain. Most of these buyers take into account the cost of getting the foreclosure properties, the added expenses and the overheads that is involved at the time of bidding.

On the other hand if the buyer is seeking the foreclosure properties for their own use then it is a good deal, provided there is enough research done before acquiring the property. One should question the bankers as to why the property had not attracted any buyers in the original sale attempt.

The legislation mandating the Treasury Department to create a foreclosure-relief program and instruct banks acquiring money to report how it is being utilized has been approved today by the House with a 260 to 166 vote.

However, according to the Senate Banking Committee and House Financial Services Committee, there have already been hints that the Senate will not plan to act on the bill, meaning Obama will not be compelled to accept the terms. The 260-166 vote meant intensifying the House's part in assuring that the Treasury will do what the former thinks is needed even if it does not become a law to alleviate foreclosure.

At Obama's request, the administration of President George W. Bush last January 12 asked Congress to release the remaining funds from the $700 billion rescue package endorsed last October, causing a 15-day deadline for lawmakers to block the money. An assessment to prevent the release was discarded by Senate last week. The House is anticipates on voting on a similar resolution tomorrow.

Bush has been criticized by the House Financial Services and other lawmakers for neglecting to put limitations on Bank of America Corp., Citigroup Inc., and other companies that obtained money from the initial $350 billion, which further intensified the foreclosure problem.

The House Financial Services wants as much as $100 billion of the rescue funds spent to reduce foreclosure. In addition, reducing bonuses and executive pay packages for top executives are also the Financial Service's plans.

In a January 21 letter addressed to congressional leaders by the director of the White House's National Economic Council Lawrence Summers, Obama's staff is set to work with the Congress on courses of action to avert foreclosure properties, supervise lending by banks acquiring aid and place executive-pay limits for firms getting "exceptional assistance".

What loan modification does is to make the payments more affordable-most common of which is about 38 percent of the borrower's gross income. Lenders such as Chase, CitiMortgage, IndyMac Federal bank, etc. have loan modification programs, which come up with affordable payments for qualified borrowers and collect all payments, even if just as much as the principal. However, offers vary among lenders. The most common offers are interest rate reduction (temporary/permanent), extended payback period, and deferral of principal.

These loan modification programs aim to prevent unnecessary foreclosure properties. It is not an easy process but it is something troubled borrowers can do to prevent unnecessary foreclosures.

Some lenders send out offers to borrowers whom they think are qualified. Whether or not you receive such offers, you better call your lender and inquire. Do not just assume that you are not qualified, a conversation with your lender is still the best first step you can do. But remember, lying about your finances and other information is no help.

The length of the entire process depends on how fast your lender processes applications and how quickly you surrender requirements.

Also, lenders need proof of the bad situation you have gone through such as divorce, death in the family and disability. This is expressed in the hardship letter you have to submit as you avail the program.

Consulting an HUD-approved nonprofit mortgage counseling agency is an alternative if you feel uneasy contacting your lender. Just beware of the foreclosure rescue scammers who take advantage of such a situation.

Hopefully, loan modification programs can have a significantly reduce the number of foreclosure homes now that the housing economy is in a tough situation.

DataQuick said that foreclosures are expected to reach a high record this month after the tally is finalized. It is also to be blamed for the 30%, or maybe more decline in price across a 6-county region in Southern California.

A 50.5% sales pour back in December was not able to recover the gloomy 2008 performance.

The said company, based in San Diego, said that 19,926 pre-owned and new condos and houses changed proprietors last month. The sales went up compared to 13,240 the previous year, but new houses sales were only 1,813. It was the lowest December sales according to the company's records.

Half of the total number of properties cost more, the other half less. Unfortunately, the sales continue to deteriorate because cheaper homes are accountable for the majority of the sales.

Andrew LePage, a DataQuick Analyst, said that nothing is sure for now due to the economic crisis. In addition, no one can tell as to which location foreclosures will take over in the coming weeks or months.

Meanwhile, he also stated that the firm credit market happens to be one of the main causes of the home crisis slowing down these days. It applies to properties that are on the bottom of the price scale.

The more expensive ones are still waiting in line. Lenders are still reluctant to approve loans that are for the quite pricier homes. A report stated that among the participating lenders are Bank of America, Wells Fargo and Countrywide.

Across the nation, over a million homes entered some stage of foreclosure in 2008 and more are expected as a significant percentage of ARMs is about to reset this year.

Affected areas in Miami-Dade County include Miami, Hialeah, Homestead, Miami-beach and Doral. For Broward County, areas that were hardest hit by foreclosures are Fort Lauderdale, Hollywood, Miramar, Pompano Beach and Pembroke Pines. Areas affected in Palm Beach County include West Palm Beach, Lake Worth, Boca Raton, Boynton Beach and Delray Beach.

The company did not report all gloom however, as statistics show an improving monthly trend with declining numbers from September to October of this year. Experts are optimistic that this trend could signal stability in the region, with inventories of foreclosure properties tapering down. With less inventories of marked-down properties sold at very low rates, the housing industry could bounce back with more stabilized home prices.

However, experts are worried that stabilizing home prices may not be affordable for low income buyers. Income flows have not been commensurate with housing rates and is further aggravated by more job losses and unemployment. The increases in foreclosures in the previous months have flooded the market with more housing units than there are homeowners.

Nationwide, the count amounts to 24 million vacant homes. Banks and financial institutions are trying to sell these homes at much lower rates to get them off their books. The Neighborhood Stabilization Program is also aiming to purchase some of these properties for rehabilitation to be sold to low-income families under government subsidies.

Experts are optimistic that the incoming President Barack Obama will provide more support to the housing industry and put the economy back up. In Florida, a rebound in the real estate industry could spell more economic stability for the region.

With the housing bill that was passed by President Bush last month making a provision for first time home buyers to be eligible for loans of up to $7,500, people who have toyed with the idea of buying their first home will now have another reason to pursue the idea.

Foreclosure properties, including those that are included in government foreclosure listings, should be looked at as an option because they are known to offer some very good deals. Houses have sold for as little as half of their market values. Of course, there is the house in Detroit that has supposedly sold for $1, a one in a billion chance, a chance nevertheless.

Houses can be bought at different stages of the foreclosure process. A "short sale" is where the home owner sells the house before being foreclosed upon. The second stage is the auction. The last is, when the title of the property is with the lender.

A home owner facing foreclosure would generally try to sell the home before being foreclosed upon. By selling the house the home owner can pay back what is owed on the mortgage and thereby avoid foreclosure. There are occasions when the market value of the house is lesser than what the home owner owes on the mortgage. In cases like these, in accordance with the lender, the property can be sold for an amount lesser than the balance on the mortgage. If directly buying from a home owner, then public records can be used to find out if there are any other loans or taxes that haven't been paid on the house in question.

While dealing with a bank, the other liens and unpaid taxes are usually taken care of by the bank itself. Banks try to sell homes as soon as they can because they have to spend a fair amount of money in the upkeep of the home.

Auctions, ideally, should be left for the pros.