With the credit crisis showing no signs of abating and gas prices continueing to rise, the number of defaulting mortgages and foreclosures continues to rise. There is also increasing evidence that mortgage companies, many of whom outsourced their administration to third party operators are finding that the administrators are cracking under the sheer volume of paperwork that the credit crisis has thrown up.

At the time of outsoucing the loan administration most of the third party companies had no idea that they would be inundated with problem cases on the scale that has now arisen. caught short these companies are unable to provide the numbers of staff or training that is needed to cope.

A case recently highlighted by the NBC Dateline show, in which a familys home was put into foreclosure due to a computer error is becoming all to familiar a story with calls from some politicians for a moritorium period to be installed so that errors can be minimized.

Usually, a property will have to be at least three months in arrears before a foreclosure notice is made. What is currently happening that errors are taking up to 90 days or longer to be rectified meaning that properties are automatically placed in foreclosure before the errors are corrected. Once in foreclosure expenses and fees can amount to thousands of additional dollars in costs.

Complaints against mortgage companies administration departments are at record levels.

During such a time of turmoil in the market, there is hope at the end of the tunnel. The Federal Reserve rate cuts which dropped base rates to a low of 2.5% are slowly beginning to trickle into the market. The delay in cheaper mortgage deals has been attributed to mortgage providers wanting to increase margins to help cope with the number of defaulting clients.

The lack of cheaper mortgages, which was the primary goal of the federal reserve when it slashed rates has had a double negative effect of the US economy. Not only have the rate cuts not benefitted the housing market, but the effect of weakening the US dollar in international money markets is one of the primary reasons that oil, which is priced around the world in Dollars per barrell, has risen in price so dramatically.

Despite the doom and gloom, there are now historically low rate opportunities for homebuyers. Combine this with the 'buyers market' and the ability to negotiate over price and the opportunities available to those looking at investing in property for the long term are extremely good.

A sign of this can be seen in the rise of the auction market, which is reporting record numbers of sales in quality homes. Once thought to be used for more commercial properties, auctions are now being inundated with investors looking for quality investments.

As you can see there is an awful lot to consider before effecting a purchase. to avoid the pitfalls and find the best deal it is always recommended that you get professional advice on the best deals available in the market. With thousands of deals available under differing terms and conditions, mortgage shopping and advice is a must.