HUD homes, once the most numerous foreclosure homes on the market, were reduced in the past several years with the sky rocketing popularity of sub prime mortgages.

As sub prime mortgages provided even lower down payments or in many cases no down payments the homebuyer that would have utilized an FHA mortgage moved to a sub prime mortgage. This has greatly reduced the amount of HUD homes for sale. Then the bottom fell out of the sub prime market as Wall Street realized the perils of buying mortgages where the buyer had no investment of their own in the transaction. In today's market the concept of "No Money Down" is only a distant memory.

So now where are buyers going? The answer will once again be FHA mortgages with their reduced down payment takes its rightful place as the alternative to conventional mortgages. Conventional down payments have remained t 5% where FHA is once again the best deal in town with 3.5% down. This 3.5% is up by .5% from the original 3% but this is merely a reaction to the absolutely insane amount of people that received loans without any investment of their own. At the time of this writing FHA has jumped to the front of the pack for moderate sized home mortgages.

It's pretty simple. If you don't have any skin in the game what is your incentive to stick it out and pay your mortgage through the tough times.

Not too long ago their were a couple of loan programs that used the charity angle on getting the home buyer into a house without the need for the home buyer to save up for the down payment or show any financial history of responsibility. These programs were called Ameridream, Nehemiah and others.

If the mortgage industry had taken a look at these programs in isolation they would have seen that well before the subprime market had gained any momentum these charity programs were experiencing a foreclosure rate of 400% to 500% higher than the normal FHA loan with 3% down.

What does all of this mean to the real estate market and to HUD homes that are now for sale? The answer is that the HUD foreclosures in the federal inventory are only a small percentage of what will find its way to the foreclosure market in a matter of months and should continue growing for the foreseeable future.

HUD foreclosure normally ran at a steady 4.5% of all homes purchased with FHA insured mortgages. This will increase as part of the overall foreclosure market as the home buying public receives more and more FHA loans.

Get yourself educated on the single largest growing segment in the foreclosure industry. HUD homes for sale are going to increase and take over as the single largest number of foreclosures on the market. This is no small statistic as HUD homes have rules on to themselves and offer the best way to obtain a foreclosure with all the benefits.

For more information on the benefits of foreclosures please visit USHUD.com.

HUD Foreclosures

HUD foreclosures and VA Foreclosures are some of the best homes to buy when price is part of the equation. As with most Americans, price is always a concern. If not buying the same house for less, why not buy more house for the same dollar invested? When looking for a good deal it is hard to do better than the VA or HUD foreclosures market. The simple truth is that there are just more VA and HUD homes on the market, as they represent such a large number of mortgages that are generated each year. This translates into more foreclosures just by the magnitude of difference between all others comparing to the two largest.

The two largest also being government owned and operated means that they have less time to wait to make money back on the home. The FHA is especially known for selling HUD homes for less than the average sales price in a given area. FHA foreclosures represent a fraction of HUD but they are still a significant number of homes and both should be considered.

VA (Veterans Administration) and HUD (Housing and Urban Development) have different and unique opportunities for the buyer. Both are often forgiven for the local taxes normally associated with the purchase of a home (this is on a county by county basis). Be sure to ask the local title company or escrow company to look into it for you before closing as this is often missed due to their are not used to dealing with the 2 to 3 percent of the market that VA and HUD foreclosures represent.

Foreclosure Listings Increasing

As the market settled after the mortgage meltdown foreclosure listings also settled and fewer homes were on the market with a placard reading “Bank Foreclosure” in big red lettering. This was a good thing for the entire real estate market. Having an abundance of foreclosures brings the entire market down and it makes it harder for home owners, who would like to move, to get the appropriate price for their home as a similar home down the same street was sold for substantially less and the appraiser is using the foreclosure as a comparable sale.

This is just one of the problems when there are too many foreclosure listings in any area. Another issue is the television set that sits in everyone’s living room harping about the price of homes based on the number of foreclosures and this constant barrage of negative information makes most people sit on the sidelines waiting for the market to either implode completely or to correct itself. Meanwhile while they wait, others are buying foreclosure listings and making great investments.

Whatever the reason, a market can only handle so many foreclosure listings at any given time. The more foreclosures, the lower the market gets and this is a lesson the banks that were foreclosing and selling off realized too late. The market and their investments would have been better off if there had not been a rush to divest themselves of the toxic assets made more toxic by their own actions.