Foreclosure Cleanup Business Opportunity: 1 in 54 homes went into foreclosure in 2008
While the numbers in the title of this article may seem staggering, it is true according to the MSN real estate article titled, Foreclosures increased 81% in 2008. Of course, this represents an opportunity for those who clean up foreclosures for a living, or for those who want to start a foreclosure cleanup business.
But digging deeper, what else does this mean? And where does this leave companies clean of foreclosures? What follows is an explanation.
4 Reasons Why Foreclosure Cleanup Companies Will Be Profitable For Years To Come
The worst is yet to come: The article goes on to state that, “Rising unemployment and falling home prices have some experts expecting 2009 to be even worse.” In other words, the worst is yet to come, and no one seems to know where the bottom is.
As President Obama tours the country selling the newly “signed into law” stimulus package, the part that homeowners worry about is not the proposed $400-$800 more they will put in their pockets, but what will be done with the $40-$ $50 billion that has been allocated to stop the wave of foreclosures.
This brings us to the next point, ie. . .
Foreclosure (loan modification) programs do not work: There are plenty of loan modification programs that aim to help struggling homeowners avoid foreclosure. But, the numbers cited highlight the fact that very few of them are working.
And again, it’s going to get worse before it gets better because, guess what, it’s not just those who got subprime mortgages that are going to be foreclosed on anymore. Now, those with fixed-rate mortgages (for example, those who had good credit and got traditional mortgages) are beginning to default on their home loans as well.
A Credit Suisse managing director interviewed for the above-mentioned article said he expects more than 8.1 million foreclosures to occur in the next four years. This means that many businesses are coming to foreclosure cleanup companies.
Job losses compounding the problem: Job loss is probably why even borrowers with good credit who have traditional mortgages are losing their homes. Everyone from GM to Home Depot to Starbucks is cutting jobs.
And because the mortgage is often the biggest expense, it also becomes the most difficult payment to make when you lose a job.
Once again, this means an opportunity for foreclosure cleanup business owners.
It is difficult to qualify for a home loan: With tons of homes already on the market, many more are about to be added as it’s harder to qualify for a mortgage now.
Even the proposed $8,000 homebuyer tax credit in the stimulus bill won’t help with this. Because how can you get credit if you can’t qualify for a mortgage? Banks now require credit scores of 750 and 780. Just a few years ago, when the market was booming, you could get 100% financing with a credit score of 580. This underscores the dramatic change the industry has undergone.
Why cleaning up foreclosures for a living is a growth-oriented job and business opportunity
While things will get better, because that’s the American way, foreclosure cleanup is a business opportunity that’s going to thrive for some time. And, even as the market adjusts itself, there will still be a need for the types of services offered by foreclosure cleanup companies.