Many economic forecasters are predicting an increase in foreclosures over the next couple of years. While it's not likely to be a uniform rise in every market, there are some issues that could create significant opportunities for real estate investors in many markets.

Over the past few years, housing prices in many areas escalated dramatically. To help buyers get into the house they wanted--which was often more than what they could really afford--lenders offered a variety of creative financing packages, including no-down-payment loans, interest-only loans, and adjustable rate mortgages.

With an adjustable rate mortgage (ARM), the initial interest rate is lower than the fixed rate at the time the loan is made, which means lower payments at the beginning of the loan. That low rate will typically apply for one, three, or five years (but any term can be negotiated). At that point, the loan adjusts to a rate according to an index chosen by the lender. In most cases, the adjustment is going to mean a higher interest rate and higher monthly payments.

Three-year ARMS became very popular about three years ago. The first wave of them are going to be adjusting this year and could mean significant increases in monthly payments for hundreds of thousands of homeowners--and many of those homeowners are not going to be able to afford the higher payments.

Here