Foreclosure investments can be made by providing refinancing options to the property holder who has defaulted in making payments.
In fact there are an ever increasing number of web sites who offer to connect individual homeowners and other borrowers to non - traditional lenders who can help the former meet the payments requirements to the mortgage provider.
The most common scenario which leads to foreclosure investors stepping in begins when interest rates start rising, forcing those home owners who have taken loans under a variable interest rate scheme to pay more and more as the equated monthly installment (EMI).
Very often, at some point they cannot meet this obligation and become over extended.
This is where the professional foreclosure investor steps in and purchases these properties at depressed or distress prices.
As per the records available in the US, the most common reason for foreclosures on property is due to a marriage being dissolved, where the party who gets possession of the property is simply not able to pay the mortgage due to reduced income levels.
The next most common reason for property foreclosures in the States is due to the failure of business ventures.
If the astute investor is able to spot the right deal at the right time and price, foreclosure investments can bring in great profits.
Although it seems unfair, the fact is that patience, some serious research, available funds and a bit of luck can turn one person's despair into another person's bonanza.