There many ways to find property that is has been foreclosed or is in the process of being foreclosed upon:

1. Newspapers.  In every newspaper in the country there is a section for legal notices.  These notices hold the legal information for properties in foreclosure.  These notices will name the person(s) who has the legal proceeding against him/her, the name of the lender(s), the name of the county sheriff, if this is a tax foreclosure, or any other pertinent information.  It will give the date of the proceedings and ask for further information from anyone who wishes to put a lien against the property.

2.  Direct Mail Campaign.   Consider a mass mailing through the postal service for home owners going through a foreclosure.  As you receive information back from this mailing you can be assured that these are good leads.  Another advantage is that you may be able talk with to someone that is still in the pre-foreclosure period.  They are motivated to sell, or they wouldn't have made contact with you about their property.

3.  Your local realtor.  Many agents will be aware of bank-owned properities for sale. A bank that ends up with properties that are being foreclosed will sometimes hire a real estate agent to represent them.  The bank doesn't want the property; it wants it sold.

4. Records at the local county courthouse.   In this method you can find the houses that are being foreclosed either by lending institutions or for

non-payment of taxes.  This method is time consuming, but you have complete control over your search.  The thoroughness of the information you collect is totally dependent upon the work you put into it.

5. The internet.   Online foreclosure listing companies will search for notifications of default. However, you need to be sure that the information you get is current and not outdated.  Only choose reputable companies with fresh listings. Read our list of the best forclosure listing services to find out about the top companies online.

There are numerous ways to find information on foreclosures.  Don't forget, another way to get information is by word-of-mouth, especially if you are looking locally.  You might hear that  the brother-in-law of the your sisters best friend is preparing to go through foreclosure proceedings.  Be ready with a business card, flyer or brochure to give them.

There are three major ways to buy foreclosure properties, and they each have their own unique set of pros and cons. You have to decide which one is best for you based on your own level of comfort and ability. Once you have a list of properties, where should you start?

Buying pre-foreclosures usually involves buying directly from the homeowner. You will negotiate directly with the current homeowner to take possession of the property before it enters foreclosure, helping to save his credit and perhaps giving him a small amount of cash for his equity.

When purchasing pre-foreclosures, there are a few things you need to do to make sure the sale runs smoothly. First, you need to look for people with loans in default. Then you have to narrow your choices down to a few good options.

You need to make an appointment with the homeowner to view the property, negotiate a preliminary price range, and find out the fair market value for the property minus any potential repair costs.

Then you need to work between the homeowner and lender to pay off the default so you can close on the property and sell it quickly for a profit. The best thing about buying pre-foreclosures is that you often won’t need a down payment, and if you do it’s often small. You can also get great prices from desperate sellers. But this particular method can be difficult and time-consuming.

Buying at auction is the most common way people buy foreclosures. While this particular method may seem simples, it can be quite dangerous. If you’re going to buy homes at auction, it’s important to do thorough research before auction day to make sure the home is in good condition and would offer a good ROI (return on investment).

Although there’s a huge benefit of savings of around 35-45% off of market values, this particular method can be a hassle. You’ll have to deal with frequent auction postponing, title search fees, and needing to have more money up front to invest.

Most people consider buying REOs the easiest way to buy foreclosures. REO stands for real estate owned. This means the lender has come into full possession of the property because the property didn’t sell at auction.

Banks don’t want to own real estate. It’s not their business to do so. This means they’re often eager to get rid of these properties as quickly as possible. This can mean good prices, but usually not as good as those you could get at auction.

One major benefit of buying an REO is that the title is usually clean. Since the lender is usually the senior lien holder on the home, other liens would be eradicated at the auction. By the time it becomes REO, the title is usually clear and any back property taxes or homeowner’s association fees have been paid.

Like any method, buying REOs does have certain risks involved. While it’s less risky than buying at auction, the savings also aren’t as great. This means you will probably make less overall profit on REOs than auctions or pre-foreclosures.

Foreclosure Auctions are hot right now

Over 5,000 people showed up to bid on 35 Uniondale homes last weekend. According to Newsday, more mass auctions are likely to become commonplace in the larger cities. What does this mean for the real estate investor? Opportunity. This is one way for lenders to let go of foreclosed properties en masse, and there are plenty of those properties to go around with the current state of the economy.

“It’s a different market today,” said Todd Yovino, the lead organizer of the showcase and the owner of Island Advantage Realty in Huntington, which has dealt in foreclosed properties for 20 years.

“With the economy doing what it is doing, more people are struggling to keep their properties,” Yovino said. “There are opportunities to buy that didn’t exist before.”

Click through to discover the top realty opportunities in your area today.

Foreclosure lists can be a goldmine to foreclosure investors if they’re accurate and fresh, but is there only one type of foreclosure listing or are there multiple types?  If you get one list, will it include all of the types?

There are multiple types of foreclosure lists, and just because you buy an “all inclusive” list, it doesn’t necessarily mean you’ll get foreclosures from all of the different types of lists that are available.

There are four stages of foreclosure and different lists are often available for each type.  The four stages of foreclosure are pre-foreclosure, auction, REO, and government repossession.  Not all properties will enter all of these stages.

The first step is pre-foreclosure.  During this phrase, the lender begins the foreclosure process because of overdue payments.  This is typically done when the lender files a Notice of Default, which gives the borrower 90 days to bring their mortgage current.

The borrower is required to come current on any arrears or sell the property to pay the loan during this 90-day period.  If this isn’t done in time, the property will enter the next stage.

The second state is auction.  In this phase, properties are posted for public sale.  These properties can be purchased at the foreclosure auction by paying the past due amount plus any other costs.  Sometimes properties don’t sell at auction and they enter the next stage.  Most foreclosed properties that reach this stage never receive bids.  This puts them into the next stage.

The third stage is known as REO, or real estate owned.  This is when the lender comes into ownership of the property.  When the property doesn’t sell at auction, the lender gains full control of it.

When this happens, the mortgage has ceased to exist, and the bank now owns the property in full.  The bank must then evict the homeowner from the property, work to get any tax liens removed, pay off past-due homeowner’s association dues, and make any necessary repairs.

The fourth and final stage is the property’s ownership reverting to the government.  This happens sometimes when loans are insured by a federal agency.  These agencies might include HUD, the VA (Department of Veterans Affairs), Fannie Mae, or Freddie Mac.

During this phase, the government reimburses the lender for the amount due on the mortgage and any costs that were associated with the process of foreclosure.  At this point, the government becomes the full owner of the property and it’s usually then sold to the public via a contractor or Realtor.

It’s important not to think of one type of property as better than another.  Each type of property has a nearly equal chance of being a great deal or being ridiculously overpriced.  You should look at each individual property on a foreclosure list and try to find the deals that have the most profit potential.

Those deals could end up hidden in any of the four stages, so you should keep your eyes peeled constantly for the very best deals and snatch them up before someone else beats you to them!

A human interest piece, coming from the Dayton Daily News that really expresses the way that foreclosures affect not just the home owner, but the neighborhood too.

Every day, free advertising leaflets are dropped off on the driveway of the vacant house next to Bob Johnson’s home.

And every week, he goes next door to pick up the paper piles.

The lawn is being mowed, but Johnson feels the unoccupied house could use some work. The realtor rarely comes by so trash duty has fallen into the hands of the neighbors.

The home has been empty for a year and the the neighborhood is dealing with the ramifications of it.

Johnson, of course, worries that the value of his home as well as the surrounding area will go down. He’s aware of other neighbors considering letting their homes go to foreclosure.

He has good reason to worry.

While some banks, which own the homes after foreclosures, hire private contractors to mow the lawns, city departments often end up with extra duties and costs.

Beavercreek Code Enforcement Officer Matt Funk said his department often has to track down the bank that owns the property and fine them if the property is not up to code. But taxpayers never pay because the city has another option.

“From the city’s perspective, we would try to bill the person responsible,” Funk said. “It turns into a lien on the property tax and is passed on to the owner once the land is purchased.”

This is a problem for the city's too. Different areas deal with this issue differently. In some neighborhoods, nothing is done — and the home is left to disrepair, grass dies and the home becomes a blight on the neighborhood, affecting other properties values too.

While some neighbors like Johnson in Harrison Twp. have decided to take it upon themselves to care for empty properties, the cities haven’t seen an increase of those willing to do so.

And actually, Dayton’s Brinegar says they shouldn’t.

“Technically they are trespassing, that’s the simple answer,” he said. “A lot of these properties are labeled by the city: Do not enter.”

Seems you're damned if you do, and damned if you don't!

While many parts of the nation struggle with rising unemployment and plummeting home prices, Decatur, Illinois, has outperformed national trends to create a strong housing market buoyed by a growing economy.

The labor force has grown by more than 1,500 jobs since January 2008, according to the U.S. Bureau of Labor Statistics, and that has fueled an increase in sales prices for single-family homes in the area by more than 6 percent for the same period last year.

The epicenter of the foreclosure crises is really in five main states: California, Arizona, Nevada, Utah and Florida. It's nice to get some good news for a change.

A hilarious video is making the rounds online about "pillow justice". In reality, it's a plug for the real estate site Zillow.com.

I use Zillow all the time, and if you've never been over there, you should go and take a tour. In their early days, it was pretty much just a way to look up home prices and stats. They've expanded quite a bit in the last few years to include a mortgage marketplace, home listings and lots of good real estate guides.

But, make sure you don't get "Zillowed"!

MSNBC has reported that Warren Buffet is predicting that the feds are going to bail out Fannie Mae and Freddie Mac. Sorry Mr. Buffet, I think I blogged about that likelihood last week. The only problem is that the government will probably not step in soon enough. FM and FM are bleeding red right now.

About half of the mortgage debt in the United States is held by Fannie Mae, and Freddie Mac, and they are the largest source of funding for home mortgages. The increased number of defaults, is cause for concern. Losses between April and June of this year, for the two companies totaled $3.1 billion, and fear is mounting by investors that losses will continue to grow.

Buffett went on to say, in areas where there was a real estate bubble and banks became heavily involved in the housing market, more banks are likely to fail.

Buffet also went on to say:

The economy continues to be in a recession, by his definition, and will continue to be for at least several more months.

When Buffet talks, I do listen, but I find this extremely optimistic. Heck, the Bush Administration's official position is that we are not in a recession. (Yeah, right!).

Buffett said it’s likely more banks will fail, especially in areas where there was a real estate bubble and the bank got heavily involved in the housing market.

I agree. In fact, Washington Mutual bank in California is sitting on billions of sub-prime loans. They're my bank, and I'd like to think that they have everything under control, but the truth is that we, the general public, are always the last to know.

A report in the SFGate on the state of real estate in the Bay area:

Cut-rate foreclosed homes being unloaded by banks wreaked havoc on the Bay Area’s median price in July, sending it down nearly 30 percent to a level not seen in more than four years.

A year earlier, just 4.2 percent of existing-home sales were foreclosed properties. The brisk business in bank-owned homes buoyed sales volume, especially in counties with a glut of foreclosures.

The San Francisco area has remained one of the most expensive places to live in California, but the increase in foreclosures are now affecting their bottom line as well.

“There is deep discounting in inland markets that have been slammed by foreclosures,” said Andrew LePage, an MDA DataQuick analyst.

Amped-up foreclosure sales actually could be a plus, hastening a return to normal once the deluge of bank repos ends, LePage said.

“We’re burning through them at a better rate than we were,” he said. “It’s not a bad sign that they’re selling from a market-stability standpoint.”

Spin control alert! You have got to be kidding. Since when is a gut of foreclosures a good thing? Real estate sales in California this summer (the traditional best time for sales) has been dismal and off it's mark from past years numbers.

Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, said he thinks the foreclosure flood makes the market appear much worse than it really is.

“The headline will read, ‘House prices plunge,’ ” he said. “Actually, what it should read is, ‘Foreclosed house prices plunge.’ The data show a much smaller (price) decline, between 5 percent and 10 percent in the core Bay Area of Silicon Valley, Oakland, Berkeley, San Francisco and Marin (if foreclosure sales are omitted).”

Typical academic statement. Foreclosure home prices are not the only home prices to be plummeting. In the Southern California area, there are duplex homes that just three years ago sold for over $500,000. Today they are worth $360,000. These are NOT foreclosure homes — prices have dropped and all indicators point to the fact that we have not come close to hitting bottom.

Discounted foreclosures are good news for two market segments: investors who see the chance to snap up bargains, and new home buyers who can meet today’s stricter qualifications for getting a mortgage.

This I agree with. Unfortunately many savvy home buyers are waiting this one out. Not jumping into the market right now, when prices most certainly have not reached as low as they will go, is a smart idea.

More "good" news…..

The Chicago Tribune has a great article, sharing some interesting insights into how Fannie Mae and Freddie Mac look at their foreclosed home inventory.

“As home prices decline, unsold properties are a problem for creditors like Fannie Mae because taxes, insurance and repairs drain their cash. Fannie Mae acquired twice as many homes through foreclosure as it sold in the first quarter, regulatory filings show, and late payments on its home loans—a harbinger of foreclosures—almost doubled in the past year.”

Doing the math, it's only a matter of time before Fannie Mae can no longer keep up with the glut of foreclosures they are taking one. They can't fund taxes, insurance and other costs on all these homes sitting in their inventory!

Fannie Mae’s goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, a vice president at the company.

“We want to treat that home as if it was your own, or as if you were living next door to it,” Harrison said. “You wouldn’t want that home to bring down your property value.”

My guess is their holding on to them longer because they can't get the unrealistic prices their asking! Denial is a river in Egypt people! Um, yeah sure they want to get the highest price! But what about reality? A seller is not going to keep their home at some inflated price when their in trouble — they want to dump it and fast. This sound good, and I'm sure some PR person at Fannie Mae thought it up….yes, let's not freak out the market…Well NEWS FLASH! The market is freaked out. Fannie Mae, if i may be so bold as to include my thoughts: buyers ultimately determine the property price NOT home owners.