The following is the letter we have used. You may want to consider using it. Change it to fit your style and needs.You will notice that this letter is not a short-and-sweet letter. It is a short-and-to-the-point letter. The purpose of your letter is to get the owners attention-and to have the owner contact you because they feel you can help them.

VA and FHA Foreclosures

You can find out about VA and FHA foreclosures from your local VA and Housing and Urban Development (HUD) offices. They will likely refer you to a list of VA- and FHA-approved real estate brokers in your area who are authorized to list and give access to VA and FHA REOs (real estate-owned properties).

These properties are auctioned off to the highest net bidder. The highest net bidder is the bidder whose bid, after real estate commissions and expenses, generates the most cash to the VA or FHA. Incidentally, your bid must be submitted in writing through an approved real estate broker. These are sealed bids that are opened by the appropriate VA or FHA representatives on a designated date.

Federal National Mortgage Association/Fannie Mae

Fannie Mae (which stands for Federal National Mortgage Association) is a stockholder-owned, congressionally chartered corporation. Its stock is traded on the New York Stock Exchange and other major exchanges. It is listed on the Standard and Poors 500 Stock Price Index. By buying and selling VA, FHA, and conventional loans in the secondary mortgage market, Fannie Mae is the largest real estate lender in the country.

Fannie Mae Foreclosures Being the largest real estate lender, Fannie Mae has its share of foreclosures. Being a stock corporation, it is profit-oriented and interested in minimizing losses. One method of doing so is the Fannie Mae Pre-Foreclosure Sale program.

The result to real estate investors can be the purchase of property from potential borrowers-in-default at prices below the existing loan and with new loan terms that are better than terms available on the open market. This is done on a case-by-case basis.

Why would Fannie Mae be willing to do this? The answer is to minimize losses. It is expensive for Fannie Mae to foreclose on, maintain, and then remarket a portfolio of properties. If it can dispose of the properties in pre-foreclosure, before it takes them into its property portfolio, Fannie Mae can save money.

In Chapter 11 we will present more information about the Fannie Mae pre-foreclosure program. Suffice it to say here that Fannie Mae is willing to pass on some of the money it saves to real estate investors

who purchase property under this program. Some of you are going to make some Quick Cash doing this type of foreclosure investing.

The program is directed toward real estate agents as the contact source with defaulting borrowers, potential retail or wholesale buyers, and the lenders, including Fannie Mae. Just as with the VA and FHA foreclosures, you have to discover who the real estate brokers are who are handling Fannie Mae properties. Whether Fannie Mae moves to a new program, it will always be a source of foreclosure opportunities. Once you have established contact with a Fannie Mae broker, he or she will be able to keep you informed on any changes.

You are now ready to come full circle and learn to negotiate with the owner in the pre-foreclosure time period. In the next chapter we will show you how to present the eight foreclosure options to the owner in distress. This is the beginning of where the rubber meets the road on your journey to making Quick Cash in foreclosures.