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Capitalizing on foreclosure

Andrew Pridgen, Appeal Staff Writer
Cathleen Allison/Nevada AppealKesa Pascal looks through mortgage files at Trans-Western Investments on Wednesday afternoon. Pascal says mortgage companies have seen a significant decline in business this year due to a number of factors, including tightened guidelines from lenders, real estate market slowdown and Wall Street's reluctancy to buy mortgages.
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Not surprisingly, the foreclosure boom here has its upside.

For those looking to make a buck or two, the department of Housing and Urban Development has its own Web site dedicated to foreclosures on FHA homes at http://www.hud.gov.

With traditional Realtors often not wanting to take the chance on a foreclosure home because the lender, which is the owner of the home during the foreclosure, has control of the transaction, capitalizing on foreclosure may be the new gold rush in real estate.

“It seems like a good opportunity,” said Coldwell Banker Better Homes Realtor Kathy Tatro. “It just takes a lot of work to get it to the end, and in the end the bank can buy it back.”

Buying a HUD foreclosure means the federal government insured the home, so the government also agrees to pay the lender for all money lost; so there are no liens on the home for the new buyer.

There are also “short sales” for those who secured a loan from a public financial institution. Short sales is a new real estate term for homeowners trying to sell quickly to get out.

Those looking to make a quick sale usually financed their homes using an interest-only loan. Such loans were predicated on the fact that once they came to fruition, the home would be worth substantially more.

Many didn’t, and in some cases, the home is worth less than when it was originally purchased.

Or, in some cases, job loss or victims of predatory lending are also looking to sell quickly.

A short sale is often better for a homeowner’s credit score than foreclosure.

“The only person that qualifies for a loan now has good credit and money to put down,” said mortgage broker Kesa Pascal of Trans-Western Investments.