Among the reasons given for the continued rise in number of foreclosed properties are unemployment, subprime lending, adjustable-rate lending and difficult family circumstances such as divorce or hospitalization.

Another major reason is negative equity – home value is less than loan amount. Borrowers who have negative equity, sometimes known as underwater borrowers, often decide to walk out on their loans when their equity gap becomes too big and it becomes senseless for them to continue sacrificing to pay their loans.

According to mortgage data, about one in five homeowners have negative equity. In states where borrowers are not required to pay the shortfall when a house is sold for less than the loan, many borrowers often opt to walk away rather than bear the negative equity.

Even in states where borrowers are liable for shortfall payments, borrowers with big equity gaps allow their homes to become foreclosed properties, hoping that their lenders would not pursue them with the shortfall. Indeed, some lenders often think twice before pursuing unpaid debts because of the cost.

In a study of 1,000 mortgage borrowers who are in different stages of foreclosure, 25 percent said they would choose to intentionally default or allow their homes to become foreclosed properties if they have negative equity. Calling their decision as strategic default, they would do it even if they still have the money to make the monthly payments.

The variety of the responses depended on the extent of the negative equity, the availability and quality of other options and the borrowers’ moral considerations.

Few would decide to make strategic default if their equity gap is less than 10 percent of home value. But one out of six respondents would allow their homes to become foreclosed properties if their mortgages become underwater by 50 percent or more.

Additionally, four out of five think that strategic default is morally wrong. But when the negative equity reaches $100,000, the morality stand wavers. The study also found that more borrowers who are younger than 35 and older than 65 do not believe that strategic default is morally wrong.

The impact of neighborhoods on borrowers’ decision to walk away is also significant. The study found that homeowners in neighborhoods with a lot of foreclosed properties are 82 percent more likely to default intentionally.

In view of the findings, policy makers should address the issue of negative equity when crafting programs to stop the rise in number of foreclosed properties.

If you are planning to buy a home that you will occupy for a long time, now is the time to buy, according to Moody’s Economy researcher Celia Chen. Individuals who lost properties to tax foreclosures could begin recovering by looking for bargains among thousands of low-priced homes across the country.

Celia Chen, one of the authors of the Moody’s housing report for 2009, said the continued drop in prices, the reduction of mortgage rates and the availability of tax credits are factors that support persons buying homes now. If you are recovering from the loss of assets to tax foreclosures, then you could take advantage now of bargains that can be found in communities being rehabilitated.

The Moody’s report said home prices have decreased in 381 metropolitan areas in the U.S. by an average of 25 percent and are expected to fall further by another eleven percent before normalizing. The glut of lender foreclosed properties, compounded by tax foreclosures, has been pulling down home prices further.

Chen and her co-authors believe that house prices will reach their lowest level at the end of 2009, losing about 36 percent in value from 2006 home price levels. She said her team expects the housing correction to happen at the end of the year. When the housing market has stabilized, tax foreclosures would not be as toxic as lender foreclosures in affecting the overall housing sector. President Obama’s foreclosure mitigation program, the stimulus package and efforts by the Federal Reserve and the Treasury to maintain mortgage rates at their low levels are all factors pointing to the end of home price declines.

President Obama’s $789 billion stimulus program is a multi-pronged plan that would help various sectors to hasten the recovery of the country’s economy. The program has assistance schemes for troubled homeowners, for mortgage lenders that lack capital, for financial and automobile corporations that need additional capital infusion, for states that need additional funds for job creation projects and for communities and entities that need money to rehabilitate neighborhoods. In some of these schemes, persons who lost homes to tax foreclosures can find some provisions that could help them.

The National Association of Realtors has predicted the tax credit scheme will encourage about 200,000 more Americans to buy homes. This additional number will help energize the housing market and will give hope to individuals who lost some assets to tax foreclosures.

Housing and Urban Development Secretary Shaun Donovan defended President Barack Obama’s $75 billion foreclosure program by responding to critics who aver that the program is using the money of responsible taxpayers to support irresponsible borrowers, losers and speculators. There are some people saying that the foreclosure program is unfair to Americans whose assets became tax foreclosure properties due to the economic downturn but were not helped.

Donovan insisted that the administration’s foreclosure program will help only responsible borrowers who had financial difficulties generally because of factors outside their control. Former owners of tax foreclosure properties are probably wishing they had such help when they were affected by factors outside their control.

Obama’s $75 billion program was announced to help about 9 million troubled homeowners, but critics condemned the program. They said the administration’s program will help irresponsible individuals while ignoring the needs of borrowers faithfully paying their mortgage loans. Others point to the reality of tax foreclosure properties whose former owners were not helped by the federal government.

White House spokesperson Robert Gibbs admitted that there could be irresponsible borrowers who will pass through the screening process and get assistance from the administration’s foreclosure program. But Donovan asserted that there will be checks to make sure only deserving Americans receive aid from the program. He says the program will make sure accepted borrowers are those applicants able to keep up with monthly payments so that their homes will not follow the fate of tax foreclosure properties.

Obama’s foreclosure program has been called a horrible idea by South Carolina Governor Mark Sanford. He said around 95 percent are keeping up with their monthly payments even if they are struggling with their finances. He questioned the effort of helping reckless borrowers by using the taxes paid by responsible citizens. Basically he is questioning the idea of helping irresponsible homeowners who lost their homes to lender foreclosures while failing to help previous owners of tax foreclosure properties.

Sanford was also particularly concerned about a provision in the foreclosure program that would empower bankruptcy judges to reduce bankrupt borrowers’ remaining principal balances. He says that this provision is a dangerous precedent in the country’s justice system. Individuals who are former owners of tax foreclosure properties would probably affirm Sanford’s line of thinking because the courts did not help them save their properties.

Many people view real estate as a good investment for their money. One of the best choices for investing in real estate is buying foreclosure properties. Buying foreclosure properties is especially a good idea right now with the current market conditions. A lot of people look at real estate for a new personal residence, or to buy properties for resale at a higher price or simply as rental properties that will provide them with an ongoing monthly income. Whatever your reasons are for considering buying foreclosure properties, you need a foreclosure listings service to do your research and learn about the foreclosure market so that you know what to expect.

While you may not be able to get a foreclosure property for just pennies on the dollar, the fact remains that foreclosure properties generally always sell for less. There are also many ways to maximize your savings by making smart decisions, such as financing the foreclosed property through the bank that owns it, because you can negotiate things like purchase price, down payments and closing costs. This is one way to excel at buying foreclosure properties.

Buying foreclosure properties does not mean that you will only have older, run down properties to choose from. That may have been true in the past, but with the more negative economic changes that have occurred lately, even upscale homes in extremely desirable neighborhoods are ending up in foreclosure. Still, you will probably have to put some effort into the property. When a home is a foreclosure, it usually means that the homeowner struggled for a while before succumbing to foreclosure, so ordinary maintenance may not have been done on the property. Buying foreclosure properties means you need to know as much as you can about the property before you buy it so you don’t have any nasty surprises waiting for you when you get the keys to the property.

One of the things that you need to know about is the foreclosure laws in your state. The laws differ from state to state. Some of the states require judicial foreclosures, which mean that the bank has to sue the homeowner and get a court order for foreclosure. Other states have non-judicial foreclosure laws, do not require this type of proceeding, and foreclosures are settled out of court.

When buying foreclosure properties, you need a reliable source for foreclosure listings. One of the most reliable sites is Nationwide. Along with a database stuffed full of foreclosure listings also has tons of useful information about buying foreclosure properties.

HUD foreclosure properties are often a great alternative to other real estate that is often overpriced. HUD foreclosure properties sell for less. Sometimes this is a little bit less than other homes that are similar and sometimes it is a lot less than homes that are similar. It all depends on a number of variables, from the local housing market to the condition of the home to how long the home has been on the market. Generally, HUD foreclosure properties that are in reasonable condition sell quickly. So you need to be paying attention when looking for affordable HUD foreclosure properties that are in move-in condition.

HUD foreclosure properties are sold in as-is condition. This means that whatever problems or issues the house might have, you inherit them when you buy the house. You are responsible for all the repairs or renovations that might be needed. However, depending on the dollar amount of the needed repairs, you can qualify for different types of government loans that will allow you to finance the cost of the repairs into your mortgage loan. Most states and some cities also have programs that help buyers of HUD foreclosure properties get the funds they need to buy the home and make improvements.

To make sure that you are not getting in over your head with HUD foreclosure properties, you need to have any property you are interested in inspected by a licensed or certified home inspector. A home inspector can tell you if there are structural problems with the house, such as foundation cracks, roofing problems, or major electrical or plumbing issues. All of these things can add up to major dollar amounts for housing repairs, and HUD foreclosure properties with problems such as these should be avoided if you need a place to move into immediately or don’t want to mess with extensive repairs.

On the other hand, some HUD foreclosure properties just need a bit of gently updating and a coat of paint, new flooring or some new appliances. Your home inspector will be able to make suggestions, and you can also finance the costs of these kinds of repairs or qualify for various programs to cover these costs.

Finding HUD foreclosure properties can be done at a foreclosure listings service. They have a database that is full of all the latest foreclosures, including HUD foreclosure properties and other government foreclosures. Nationwide can give you access to all the latest HUD foreclosure properties anywhere in the United States, and you can access their database whenever you want to. Nationwide is your best source for HUD foreclosure properties.