RENEE MONTAGNE, Host:
Two million adjustable-rate mortgages are scheduled to reset to higher rates later this year. That will make the monthly payments unaffordable for many homeowners.
This week, federal regulators issued guidelines to lenders in hopes of preventing some of the expected defaults. The trouble in the housing market is bad news for homeowners of all kinds. But there are some people profiting from it, like foreclosure agent Glen Daniels. He buys back homes that have been seized by lenders and then resells them on the market.
He joined us from South Florida and said the rising foreclosure rate is a real boon to his business.
GLEN DANIELS: We're a very niche real-estate business. You know, the past several years, with the hot real estate market the foreclosures were very diminished in numbers, where today we're seeing the opposite effect.
MONTAGNE: Did you get rich?
DANIELS: We're doing very well.
MONTAGNE: But obviously this is not for everyone. I would think it's a business for the brave. It must be harder to find buyers now for the homes that you're trying to turn around.
DANIELS: It is difficult right now. The number of buyers is down for several reasons. One, just the - scared of what the market's going to do next, and then also the credit situation, where the banks are tightening the credit lines. So that is also making it harder for buyers to qualify for mortgage.
MONTAGNE: And does that, though, make it then harder for you?
DANIELS: It does make it harder for us to sell these properties. We like to sell about 20 percent of our inventory at any given time. And right now we're selling between 5 to 10 percent of the inventory.
MONTAGNE: You also work with investors to buy these foreclosed and bankrupted properties. Who would want them?
DANIELS: Well, investors do want them, also first time homebuyers that are looking for a deal. They may not be able to afford the average house in a neighborhood, but there may be a foreclosure where they can go ahead and do some of the repairs themselves and get a little sweat equity.
MONTAGNE: You know, even the title foreclosure agent has a certain doom quality to it. Do you ever feel bad about the houses that you're buying and selling, knowing that the people who had them were forced to give them up?
DANIELS: It is making money off a negative situation. I've been doing this for 17 years, so I've been through the good times and the bad times. And I look at it as I'm actually helping the lenders, and in turn, which helps borrowers on a more global scale. I'm actually helping the lenders recoup the money that they've lent out.
MONTAGNE: So I take it you've never walked up to a house and, you know, had to face people walking out with suitcases.
DANIELS: Yes, I have.
MONTAGNE: You have.
DANIELS: It is a tough situation, yes.
MONTAGNE: What did you do when that happened?
DANIELS: I've gone as far as rented some of these people apartments when they couldn't afford to rent their own apartment to give them some time.
MONTAGNE: But you think that this is not the end at all, that this is the beginning of a stretch?
DANIELS: Yes. I believe this is not an isolated time, and I believe that it's going to get worse before it gets better.
MONTAGNE: Well, thanks very much for talking with us.
DANIELS: It's my pleasure.
MONTAGNE: Glen Daniels is the director at foreclosure.com. That's a Web site that helps investors buy foreclosed and bankrupted properties.
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