Real Estate Information

The White House is stepping up pressure on lenders or servicers to help stem the tide of foreclosures. Although the Obama administration has issued guidelines and programs since early this year, main street is finding no help when calling lenders to modify their loan. The White House has come up with a new plan....publish a list of servicers who are not doing enough. Now that ought to do the trick right?

If shame was a determent then banks would not be giving out huge bonuses. Those banks were publicized and guess what? Banks are on track to give out record bonuses again this year! Why? Because Wall Street was bailed out and is has gone up over 35%! All this while main street has suffered the consequences of the risky investments of the banks.

That's the solution? SHAME???? What about penalties on the banks who took our tax money? Or strings attached to them using it to help main street? Does any of this occur to those better educated than me? What about threatening their tax reductions? They went to Ivy League schools and the best they come up with is....Shame the Servicer/Lender? Everyone knows that money talks.

Come on....who exactly is coming up with ideas? You may need some help with alternatives to foreclosure because this new IDEA is not going to work. Visit www.ishortsaleaz.com to see how we can help you navigate a possible loan modification, short sale or foreclosure.

The New York Times reports that nearly one in 10 homeowners are behind on their mortgage. That is about five million households. As I stated on previous post many banks are doing TEMPORARY 90-day loan modifications and not making a true effort in helping homeowners who need it. Many analysts believe it is highly unlikely that permanent loan modifications will be overly successful.

The overall third quarter delinquency rate is the highest ever. It is up from one in 14 mortgage homeowners in 3rd quarter of 2008. The combined percentage of foreclosed and delinquent homeowners is 14.41 percent. The top four concentrated areas with problem mortgages is California, Nevada, Arizona and Florida. The percentage of loans in foreclosure in September was 4.47 percent compared with last year at 2.97 percent.

The subprime foreclosure market has receded and majority of loans foreclosing now are traditional mortgages that were deemed the safest. Due to unemployment many homeowners are struggling to retain their home. There will be a lot more distressed supply moving in the market and it will go up the food chain to middle and high priced homes.

If you are struggling with your mortgage please go to www.ishortsaleaz.com to read about your foreclosure alternatives.

Many homeowners ask themselves and me, for that matter, this question almost every day. Short selling is a responsible alternative to walking away and can have less negative impact on you than foreclosure. However, not all homeowners are a good candidate and that is based on the type of loan you have, who your lender is, and what kind of assets you own.

With that being said, most homeowners are prime candidates for a short sale and can relieve or minimize their liability for a large sum of debt owed to a lender, even after foreclosure, or HOA or other liens on against the property. In a short sale we can typically get your liens paid by the lender.

If you want more information on what is a short sale, how to do a short sale, legal or tax possible implications, credit implications, resources for assistance, go to www.ishortsaleaz.com and read the FAQ's and other resources that will help you answer your questions.

The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows.

For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion. That's up 58 percent from 3.96 percent a year ago.

Being two months behind is considered a first step toward foreclosure, because it's so hard to catch up with payments at that point.

The rate was up 7.6 percent from the second quarter. That's a much smaller jump than the 11.3 percent rise in the second quarter from the first, and the 14 percent leap seen in the quarter before that.

The statistics, which are culled from TransUnion's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.

- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago.

- In Florida, the rate was 13.3 percent, up from 7.8 percent last year.

- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008.

- In California, the rate jumped to 10.2 percent, from 5.8 percent last year.

North Dakota remained the state where mortgage holders most often paid on time, with just 1.7 percent delinquency, up from 1.4 percent last year.

TransUnion expects delinquency to rise to just short of 7 percent for the fourth quarter, compared with 4.6 percent for the 2008 fourth quarter. The rate may reach 16 percent in Nevada. Those states with the highest delinquency and foreclosure rates will likely continue to see depressed housing prices.

The Phoenix area recorded 6,100 sales in October, same as September but up from 4,500 sales in October 2008. A whopping 45% of these sales were foreclosed properties.

More than 3,800 homes were foreclosed in October 2009. That is up from 2,900 in September.

We still do not see market recovery as recovery takes place in a growing economy and lower interest rates. Our economy is declining with a weak job market and interest rates are expected to rise in 2010. Half our sales stem from foreclosed homes and even those are marked down approximately 19%. This decrease in home values means that current homeowners cannot "move-up" in home and thus most activity is taking place in the lower end housing market.

First-time and investor buyers are driving our market. That leaves homes priced over $250,000 without the demand that lower valued homes have in this market.

Arizona ranked number four in foreclosures across the USA. We had 13,345 foreclosure filings in October 2009. That is one foreclosure for every 200th home. The good news we are down 11% from September 2009 and down 24% from October 2008.

Vulnerable homeowners who are in adjustable rate home loans are experiencing a small reprieve right now with interest rates at low levels. However, when rates do rise again, and they will, then these same homeowners may begin to experience mortgage payments that are beyond their reach.

Studies also are showing that homeowners in areas such as Arizona where prices have dropped up to 76% in some areas from their high are literally walking away due to the enormous amount of negative equity in their home. Some economists note that only a principle reduction would keep these people in their homes, something that banks are not willing to do.

Until we see employment and housing prices stabilize I will not comfortable in saying we are at the bottom. Besides, you never know the true bottom until you look down!

Are recent survey from move.com shows investor buyers (12.1%) have doubled since March 2009 (5.6%). The survey found:

• 15.8 percent of those interested in investment property were men
• 8.1 percent were women
• 52.6 percent of the investment buyers were between ages 35 to 49  

Of the 25.3 percent of buyers who are focusing on foreclosure properties the survey found:

• 42 percent regard the purchase they are considering an investment and don’t plan to live in the property themselves
• 13.2 percent plan to rent out the property
• 11.3 percent are going to fix up the property and resell it
• 17.4 percent plan to house a family member until the property can be sold profitably

Of the 9.8 percent of buyers who say that they plan to purchase and live in a property in the next two years, 5.4 percent plan to purchase in the next 12 months; 48.3 percent are first-time buyers; 52.8 percent are women, and 44.1 percent are men.

Investors buying up our foreclosed homes is both a blessing and curse. Unfortunately, investors have flooded the Phoenix market to scoop up low priced homes and turn them into rentals. This is causing a flood of rentals in the market, reducing the rents, and turning neighborhoods into a high volumn rental area.

Some banks, very few though, market a foreclosed home to primary homebuyers only for a select amount of time. If they get no offers, then they open it up to investors. I wished this was more of the standard than the exception.

The "Making Home Affordable" loan modification program implemented by the Obama administration says that it has reached about 20% of troubled homeowners mostly in California, Nevada and Arizona.

Economists conclude that it is unlikely it will help 3 to 4 million people this year which was the goal of the Administration. The Administration is blaming servicers for dragging their feet.

What have I noticed? The Administration thought it a good idea to offer $1,000 bonus to the banks for each homeowner they did a 90-day temporary loan modification for. What happened? You got a 90-day temporary loan modification and the bank got a $1,000 per file - FREE MONEY! Lots of people I speak to say they ended up worse off after the 90-days was over because they owe late payments, missed payments, fees, etc. Some say their payment went higher than their original payment and lots say that the bank is refusing to modify thier loan permanently.

Once again, the banks are taking OUR tax dollars and taking advantage of the troubled homeowners AGAIN. Guess what? No one is writing or complaining about this......I haven't read one article on this is happening. Are we really this complacent?

Appeals have been on the rise for at least the last five years but jumped 50% in past two years due to a plunge in property values.

The FINAL deadline for appealing your property valuation is December 15, 2009. This year, the deadline to file a free administrative appeal with the Assessor's Office passed in April, but there are still a few more weeks to file an appeal in Arizona Tax Court. No attorney is required, but there is a filing fee of $142.

This year's valuations were established in January and mailed to owners in February.  But the taxes based on those valuations aren't due to be paid until the fall of 2010, an 18-month lag that creates a disconnect between the value the county puts on a property and what an owner considers its value in today's market.  Valuation notices indicate both a "full cash value" and a "limited property value," the two categories by which various property taxes are determined.  The full cash value, which is intended to closely resemble market value, can be appealed.  If you don't think you could have sold your home on Jan. 1 for the full cash value listed on the valuation, you may want to consider an appeal

The Arizona Department of Housing received $20 million from Washington and is using that money to help people buy foreclosed homes.

You can get a loan for up to 22% of the value of the home and if you live there for a certain period of time you will never have to pay that money back.

There are a few requirements. For instance a family of four in Maricopa can't make more than $79,000 a year. You must make a down payment of at least 3% on the home, 1% coming directly from the borrower's own pocket. And you must also take an eight hour course on home ownership.

For a list of lenders who carry this program or for more information on the requirements go to www.YourWayHomeAZ.com or contact me for assistance.