Those engaged in foreclosure investing are sensitive to any indicator, when released, that could reveal some morsel of valuable information about the foreclosure market and where it is headed. The future, after all, is anything but certain, and investing in distressed properties carries with it some degree of risk.

Today’s news that foreclosure activity hit a seven-month high in the month of October is one of those valuable pieces of information that undoubtedly perked the attention of foreclosure investors across the country.

What, exactly, does this mean at this point in time and for the future?

First, we will look at what was revealed. The number of properties that received a foreclosure filing – from a notice of default to a notice of sale – rose by 10% from September to October. That is a sizable increase, especially when one considers the fact that a key piece of information – the percentage of homeowners who were at least two months behind on mortgage payments – also rose heavily.

Additionally, 22.5% of all properties – nearly 11 million homes – were underwater, or owed more than what the property is worth with today’s values. Since underwater homes are forerunners of residential foreclosures, the statistic is troubling for some experts.

What do these statistics, collectively, mean? The spike to a seven-month high is one data point, but it is revealing of a greater trend. Foreclosure filings, as a whole, are increasing and have been since the end of July. Coincide this data with analysis of the market and of banks and other lenders resuming foreclosures and one can see the trend: More foreclosures will enter the market soon.

Supply will be enlarged, which will drive down prices even further. As an investor, you will have more ample access to buying opportunities, with plenty of single family homes and multi family homes to choose from per market.

The added supply will make these properties cheaper, and the super-low interest rates will add to that affect. Indeed, this week rates on 30-year fixed-rate mortgages fell below 4.00% for only the second time in recorded history. The two pieces combined indicate that the market will be defined by one, central theme for the next year: Affordable foreclosed homes for sale with plenty of supply, enormous profit potential, and dirt-cheap financing.

To sum it up, should the trend hold – and all signs indicate that we are in for a very lengthy trend – this market will be an investor’s dream.

According to the study, single family foreclosure homes in New York City have dominated housing reports, but the rise in foreclosures among multifamily rental dwellings in the area have actually risen at a pace that has not been seen since the early part of the 1990s. In addition, such foreclosures actually affect more people since rental multifamily buildings house almost 50% of all New York residents.

The center's report showed that since at least 2007, over 2,100 rental multifamily properties have received notices of foreclosure in the city, with over 44,000 households believed to have been affected by these notices. Among the boroughs, Brooklyn reportedly has the most number of multifamily foreclosed homes for sale in New York City. The report claimed that this may be partly due to the fact that the area has the biggest stock of small rental multifamily homes, with most of them ranging between five and 19 units.

In Brooklyn, nearly 1,500 multifamily rentals have received notices of foreclosures since 2007, affecting nearly 15,000 residential units. The study also revealed that seven out of the ten neighborhoods with the highest number of foreclosed multi family homes for sale in the city can be found in Brooklyn. Last year, a total of 373 foreclosure notices were issued to Brooklyn multifamily rentals, the report also claimed, with Bedford-Stuyvesant accounting for 18% of these foreclosure-related notices.

The increased number of multifamily foreclosed property for sale in New York City, market analysts have stated, affects tenants and whole neighborhoods, particularly those with huge supplies of multifamily rentals. Most of these multifamily buildings, they further added, are deteriorating as they remain distressed and unoccupied. Such distressed buildings usually receive 21% more code violations within the quarter when the notice of foreclosure has been filed.

During the six months following the foreclosure notice, an average of 15% more code violations are often reported for these properties. The report also asserted that these foreclosed multi family homes for sale can be really costly for the city. Moreover, local communities, households and the general housing market are also affected by the deteriorating properties, particularly in hard-hit boroughs like Brooklyn.

Foreclosed homes in Columbus and in most of the state's local areas eased down last month as January 2011 figures show a drop in the foreclosure activity of the state. For the month, a total of 8,924 foreclosure-related filings were recorded in the region, representing a 20% decline when compared with January 2010. When compared with December 2010, the decline was 15%.

The figure included foreclosed homes in Ohio up for an auction sale, notices of default and properties repossessed by lenders. Last year, the state posted a full year decline of 5% in terms of foreclosure activities when compared with 2009 levels. For the month of January 2011, Ohio's nationwide ranking in terms of foreclosure numbers is 13th. The top three states with the highest foreclosure rates for January remained Nevada, Arizona and California.

Despite the drop in foreclosure activities, including those related to multi family foreclosures, housing industry analysts stated that this should not be taken as a sign that the housing market crisis is at an end. According to them, the drop is mainly due to the controversy surrounding lenders' alleged use of faulty documents in filing for foreclosures; an issue that forced an almost nationwide moratorium on foreclosure processing and sales in the fourth quarter.

Analysts have also stated that the decline in the number of homes for sale foreclosures, which was mirrored in almost all parts of the U.S., only meant that banks are weighed down by the sheer volume of foreclosure cases that piled up during the fourth quarter of 2010. They stated that lenders are taking a longer time reviewing documents after the robo-signing controversy.

Local analysts warn that single family and multi family foreclosures are likely to increase again in Ohio this year. The same is predicted for the whole country as lenders restart cases that were stalled by the documentation controversy.

Louisville foreclosures jumped by 20% in 2010 compared with 2009, according to year-long housing market reports. A total of 7,540 residential foreclosure-related filings were issued in the metro area during the year. Housing industry data also revealed that foreclosed property totals in the city have been rising consistently since 2007. The good news, analysts stated, is that the level of increase is not as high as the levels recorded in metropolitan areas that experienced extreme housing booms.

Statewide, Kentucky foreclosures follow the same trend as city housing figures during 2010, with the whole state in a relatively better position during the year. For Louisville, one household out of every 73 received a filing in 2010; a ratio that is much better than the national average wherein one household out of every 45 received a filing. For 2010, Louisville was ranked 82nd among 203 metropolitan areas in the U.S. in terms of number of foreclosed property filings.

Nevada remained the region with the highest rate of foreclosure, including filings for multi family foreclosures and other types of residential properties. In 2010, one household in Nevada out of every 11 was in some form of foreclosure. For the whole U.S., foreclosure-related filings jumped by 2% compared with 2009 levels and surged 23% compared with 2008 figures.

According to housing market analysts, increase in year-over-year foreclosures might have been higher in 2010 if not for the moratorium imposed by major lenders all around the U.S. during the last three months of the year. The temporary halt in the processing and selling of foreclosed properties implemented by lenders helped lower the number of foreclosed properties for the year, but the number still reached record levels.

Local analysts are predicting that, in 2011, filings for single and multi family foreclosures will slowdown in Louisville. However, they also stated that the national housing market will require a few more years before it can return to normal levels.

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The number of Columbus foreclosed homes for sale and for-sale distressed properties in various areas of the state recorded significant declines in October after controversies surrounding some lenders' alleged use of faulty affidavits came out in the news.

Questions regarding the validity of lenders' processing of foreclosure cases led to some banks' decision to halt the processing and sales of foreclosure homes in Ohio and in other parts of the U.S. The moratorium has already been lifted by lenders in almost all areas of the country and according to housing market observers, lenders are now trying to make up for lost time, hence the increase in foreclosure totals.

In Montgomery County, over 4,000 foreclosures, including those associated with single and multi family houses have been filed so far in the current year. Warren County, on the other hand, has so far recorded 1,200 filings for the year, while Greene had accumulated 703 foreclosure-related filings for 2010.

Housing industry observers are predicting that the number of for-sale houses from foreclosures will rise in the coming months as lenders pick up where they left off. Foreclosure processing came to an almost standstill in October when questionable procedures used by lenders were discovered. Companies like JP Morgan Chase, GMAC, Bank of America and PNC Bank all decided to temporarily freeze foreclosure procedures in several areas of the country, resulting in foreclosure totals recording declines in almost all regions during the month of October.

The Attorney General of Ohio Richard Cordray has filed a lawsuit against some of the lenders, accusing them of using robosigners to speed up the process of foreclosures. One GMAC employee admitted in a sworn affidavit that he signs over 10,000 foreclosure documents every month, making it almost impossible to review the details of each case.

Meanwhile, court officials in Montgomery and in several other areas of Ohio have revealed that they are currently reviewing foreclosure cases related to various properties, including multi family houses, to determine whether there have been faulty documents used in these cases.

Data for the city shows that the area lags majority of U.S. metros in terms of economic recovery. Most economists have stated that the city's economy will not gain traction unless the number of foreclosed homes in Las Vegas is lowered. Latest data showed that there is not much hope for that as an estimated 80% of homeowners in Las Vegas own underwater mortgages.

This means that four-fifths of homeowners have residential properties that are worth less than what the owners owe. With these numbers, further additions to Nevada foreclosure listings are expected in the coming two years or so. In addition, 15% of workers in the city are unemployed.

According to housing market observers, these numbers have caused majority of homeowners to walk away instead of bothering to pay their mortgages that cost more than their residences. Such tendencies further expand the number of single and multi family home foreclosures. It has also resulted in majority of homeowners' credit ratings to suffer.

Housing market experts have asserted that the only way Las Vegas can recover economically is to control the growth of foreclosed properties listings and this can only be done through job creation. They further added that no amount of financial injection from the government will solve the wide ranging problems of the city.

According to housing experts, the main problem is that the government's Home Affordable Modification Program involves lenders offering lowered interest rates and deferred payments, but majority of these lenders are unwilling to reduce the principal loan mortgage which is what would have helped underwater borrowers in the first place.

Predictions for Las Vegas remain bleak, with single and multi family home foreclosures expected to further increase in the coming year. Analysts believe that the fact that homes for sale are staying longer in the market means that there is no interest among buyers, which would make it even harder for the city's residential property industry to recover.

Local housing authorities have stated that the number of nuisance properties in the city keeps increasing as more homes fall under Dayton foreclosure auctions. As of 2010, the number of vacant premises in the city is estimated to be at 12,000, with majority of them residential.

City inspectors have stated that the list of vacant structures continues to grow because housing authorities have become more efficient in identifying vacant premises and because a lot of property owners are losing their homes to foreclosures and seeing them sold off at Ohio home auctions.

As the lists of foreclosed properties grow in Dayton, the problem of abandoned and vacant properties also escalates. The city's vacancy rate currently stands at around 21%, with Dayton targeting a 10% goal. This means that to achieve its goal, Dayton needs to tear down between seven and eight thousand units and create more jobs.

According to city housing officials, the policy before was to save single and multi family properties so that they can be renovated. However, the declining population of Dayton and the ongoing weakness in the region's economy meant that there is not enough market to take in renovated dwellings. For now, Dayton is not much into renovation and is instead focused on demolishing structures in worst conditions.

The aggressive demolition campaign hit its stride in 2008, the year when around 300 structures were taken down in the city. Before that year, demolitions in Dayton totaled around 30 to 40 per year. The demolition program is also supplemented by federal money meant to stabilize communities hit hard by the foreclosure crisis.

Neighborhoods in the area have received almost $45 million during the Neighborhood Stabilization Program's (NSP) first and second rounds. The money was used to rehabilitate vacant single and multi family properties and to demolish those that are beyond renovation. Local authorities are hoping that the third NSP round will provide the city with further monetary assistance.

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Although rates are at 4.57%, home buyers involved in York foreclosure investing are finding it difficult to find financing for their planned purchases. According to most buyers, they are encouraged to buy but most are unable to get mortgages because of credit history problems and other restrictions imposed on mortgage borrowers.

Real estate agents who specialize in Pennsylvania foreclosed homes for sale have also revealed that appraisals are delaying deals because most appraisers use lower rates paid for foreclosures as comparables instead of the prevailing market price. Local agents have also claimed that a lot of home buyers who come to their offices are unable to obtain mortgages, with majority of agents not making it any easier for these home buyers by requiring them to be prequalified for a loan before assisting them in choosing a house.

Agents remember buyers of multi families foreclosures and other types of residential properties easily acquiring mortgages a few years ago, with some opting for subprime mortgages or 100% loans. However, those kinds of deals are not easily available anymore, agents have revealed.

Nowadays, lenders are scrutinizing borrowers' debt to income ratio, a parameter that often results in borrowers' loan applications being denied. Market observers have stated that people who wish to purchase real estate foreclosed homes would need to have a debt of less than 45% of their income to have any chance of getting accepted.

Real estate market observers have advised home buyers that getting rejected once does not mean that they will never get a chance to qualify. For potential buyers with low credit ratings, they have a chance to get a loan, but the rate will probably be higher or it could include points.

Despite stricter requirements for acquiring mortgages, real estate agents have stated that there is no better time to take advantage of single family and multi families foreclosures than now, while mortgage rates are at their lowest in decades.

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Fitch downgraded from AA to AA- the $339 million GO bonds which the city has already issued. Additionally, Fitch assigned AA- to the $145 million GO bonds sold in May.

Based on the Fitch report, North Las Vegas pre foreclosures and completed real estate foreclosures are still among the highest in number in Nevada. In addition, they also pointed out the slow economy in 2009, the decline in tax revenues, the drop in property values, the unemployment problem, and the decline in revenues from gaming and tourism.

Analysts said that single-family and multi family foreclosures in North Las Vegas pushed down property assessments for fiscal year 2010 by 27 percent and by a further 29 percent for fiscal year 2011. They said that the non-agency foreclosure rate in the city was far above the national non-agency foreclosure rate of around 21 percent.

Despite efforts by the city to manage its budget and expenditures, its finances are being weakened by substantial declines in tax revenues. Although the city stopped hiring and cut down its expenses, its general fund total is still expected to fall to about $14.9 million at the end of fiscal year 2010, far below $39.4 million at the end of fiscal year 2009 and the record high $45 million at the end of fiscal year 2008.

In May, both bank repossessions and pre foreclosures in Nevada decreased, but the numbers were still high. Pre foreclosures dropped by 12.7 percent from 12,121 in April to 10,583 in May while repossessions dropped by 8.13 percent from 4,096 in April to 3,763 in May.

All in all, in the first five months of the year, there were 14,816 single-family and multi family foreclosures that were taken back by mortgage lenders.

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In the first quarter, nearly 4,600 homes were put into foreclosure in Pima County, where Tucson is situated, and nearly 2,000 of these units were already in bank foreclosure listings.

In April, more than 37 percent of total house sales in Tucson were distressed properties, which consisted of 123 foreclosure short sales and 339 REO sales. Closed transactions during April rose by almost 5 percent to 1,227 units, excluding sales that were not represented by members of the Tucson Association of Realtors.

As foreclosures continued to push down prices, the average sales price for all Tucson homes sold by realtors in April was $199,986, down by 0.86 percent from the $201,719 average posted in March. The average list price also dropped from $211,003 in March to $210,291 in April.

Pending home sales also increased by 1.2 percent from 1,549 contracts in March to 1,568 contracts in April.
The average sales price for short sales in April was $153,438, a bit better than the average price for REO units, which was $141,857. Existing properties were sold at an average price of $219,658.

A number of local analysts said that the large percentage of underwater mortgage borrowers contributed to the continued rise in single and multi family homes entering foreclosure in Tucson – a reality also affecting many other cities.

Reports said that 40 percent of all Tucson home loans are underwater, increasing the number of properties in danger of entering lists of Tucson pre foreclosures and eventually, lists of repossessed homes. With many borrowers taking second mortgages on their homes, rolling closings costs into the loans and making only interest payments, it is no wonder that a huge percentage are underwater.

Local analysts also added that the 40-percent share of defaulting mortgages was much higher in the past, as homes sold through short sales and foreclosure sales are no longer included in the estimates.

The only positive things that can be gleaned from these increases in distressed properties are increased home affordability and market correction. While foreclosures hurt homeowners, they also provide buying opportunities for renters and other families who previously could not afford to buy homes. The process of how to find foreclosed homes for sale is also easier if there are a lot of distressed properties on the market.

Foreclosures are also real lessons for new home buyers, making them more conscientious in handling their finances and in paying their home loans.

Statewide, the number of repossessions and pre foreclosures in Arizona also continued to rise in the first quarter. Filings spiked by more than 22 percent during the quarter to 55,686 postings, accounting for nearly 6 percent of all filings nationwide.

Of the total statewide filings, a total of 21,442 postings involved bank owned single and multi family homes, accounting for 38.5 percent of total foreclosure filings in the state.

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