The foreclosure rate is climbing and that trend is expected to continue over at least the next few years. Experts agree that a major driver of this trend is the creative financing packages (or nontraditional mortgage products) that lenders have developed in recent years. These loans include adjustable rate mortgage loans, often with various payment options; interest-only mortgage loans; and extended maturity mortgage loans (that is, loans with terms longer than 30 years).

If you’re interested in focusing on foreclosures as part of your real estate investment strategy, you will want to read what Sandra L. Thompson of the FDIC said when testifying before a U.S. Senate subcommittee on the risks to both borrowers and lenders of these nontraditional mortgage products. Click here to read her remarks.

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Wealth Intelligence Academy