The housing market surged at such pace that in fact it had overheated the economy, the Fed had to step in and starting in June 2004 raised the interest rate for 17 consecutive months. It took up until August 2006 before the Federal Reserve put a hold on further increase, largely due to the sloping slow down in the housing market and in consideration of inflation.

Homeowners who acted irresponsibly and took the so-called "exotic" mortgages, such as; interest-only, negative-amortization, and adjustable-rate loans are now running for cover, now looking to refinance to a fixed-rate and hoping to avoid foreclosure as the interest rate rises. Unfortunately, when the interest rates reset, some homeowners will be stuck, paying considerably more on their mortgage payment and for some homeowners, foreclosure might be the only option. Foreclosure can reclaim a home no matter where it’s located, what price range it falls into, or the income bracket of the owner. It may be hard to believe, but even the very affluent are not immune from defaulting on mortgages.

With the slowing down in the housing market and with the large inventory of homes for sale it could take a long time for any property to sale. The market is full of motivated sellers who are desperate for attention from a potential buyer. This market condition is a haven for buyers.

Foreclosure sources are now presenting excellent purchase opportunities for both real estate investors and homebuyers. Foreclosures databases include many homes in the upper market areas. Now is the time to find your bargain. Now it’s easier than ever to grab a steal, even on a high-end home. Now you can snatch your dream home for only a fraction of its real value. Now it’s the time for first time home buyers to get into home ownership with very little money down and with a motivated seller who is willing to pay for the buyers closing costs and even to offer an allowance for remolding.