Real Estate Information

Unfortunately, in our society there are those who will prey on vulnerable people. A vulnerable segment of society right now is sellers who have been foreclosed on and are in need a home for their family.

Phoenix police are warning people that they are finding scammers who are renting to these types of families on homes that should not be rented. As a matter of fact, they are renting the same home to multiple people! They are homes in foreclosure and not really available for renting. One arrest has been made in connection to four different scams so far.

The scammers are breaking into these homes, changing the locks and using the internet such as Craig’s List to lure in potential renters. They are doing month-to-month “leases”, no credit check, you can only pay your deposits in cash, and really not even having a lease agreement for you to sign. These people meet you at the home and say they are showing their home for a family member who is out of town.  Does this sound too good to be true? That is because it is!

Legitimate landlords do not rent homes this way! Plus, never pay in cash, no landlord expects that and if they do....RUN! Not only is it potentially a scam, you have no documentation of monies paid. When re-establishing credit for future credit, it is imperative you have cancelled checks showing your rental history as being paid on time. As a matter of fact, most landlords expect a certified check or cashier’s check for the deposits and first month’s rent.

To avoid being scammed, the first thing you should do is speak to a trusted real estate agent. Not only, can they assist you with finding a rental at little to no cost for you, they can research the tax records to see if a foreclosure notice is filed on the property, they show only properties where the legal owner is the actual landlord, and they can assist you with the legal contracts and deposits. If a real estate agent is trying to charge you a high fee to show you rentals....then I would question if they are a trusted real estate agent. Most agents don’t charge you anything for this service as they typically get paid by the landlord when the home is leased. However, some agents will charge a small, token fee due to the amount of work involved and to show them your seriousness in not wasting their time.

Most, if not all, landlords are overlooking credit issues with potential tenants that show a short sale or foreclosure on their credit. What most landlords are seeking now is that you have a job to pay the rent and that you are current on the remainder of your debt such as credit cards, auto loans, etc. Due to the housing market, they know there are many reasons for people to have a foreclosure or short sale and they are not even blinking an eye about it. 

Who says foreclosure only works one way? How often do you hear of anyone getting to foreclose on a bank? Starting five months ago Bank America failed to investigate their paperwork properly and foreclosed on a homeowner who didn’t owe anything on their home. They paid for home with cash and never owed a dime to anyone for it!  A judge agreed and ordered that Bank of America pay all the attorney’s fees and damages it has caused the couple. 

However, much to their disappointment, the Bank did not comply with the court’s ruling. Todd Allen, the homeowners attorney said, “They've ignored our calls, ignored our letters, legally this is the next step to get my clients compensated.” So after five months of waiting, Allen did what the bank tried to do to the homeowners.  They went to the bank and seized the bank’s assets!

Nyergers, their attorney, sheriff’s deputies, and movers went to the bank personally and foreclosed the property.  The movers were instructed to take the desks, computers, filing cabinets, copiers, and all the cash in the tellers’ drawers for their debt.  After an hour, the bank manager handed the check over for all the legal fees. 

"As a foreclosure defense attorney this is sweet justice" added Allen. This is often seen in courts because banks do not carefully investigate prior to filing a foreclosure on some properties. So take that Bank of America and start taking foreclosing on a home seriously!

Home price index has been confirmed by the Standard & Poor’s (S&P) and Case-Shiller and both presented a not so good news regarding the first quarter where the national reading received another blow which is 4.2 percent lower in the current recession

It seems that home prices in the national level are still at a low and continuously going down.  I don’t think the government’s resolution in 2009 and in the first few months of 2010 of giving away tax credit incentive worked long enough to change the fate of the staggering home price dip, only causing an artificial bump in sales with no permanent change.

To demonstrate what the numbers are showing, Dales concluded that based on the Case-Shiller report, home prices is now a 33 percent decline from the 2006 trend.  Patrick Newport, U.S. economist for IHS Global Insight explains, “They reduce wealth, which reduces consumer spending….They force lenders to tighten lending standards, since the collateral is depreciating in value off the bat, reducing existing home sales. They reduce state and local property tax collections, resulting in spending cutbacks.”

“The remarkable thing about this downturn is that even though prices have fallen by more than in the Great Depression, the bottom has yet to be reached,” Paul Dales, senior U.S. economist for the research firm Capital Economics says. “We think that prices will fall by at least a further 3 percent this year, and perhaps even further next year, “ he added.

It’s hard enough to see that home prices are dropping like rain all over the States and it is believed that this decline may go on for much longer periods of time.  If this continues to happen, banks will have to deal with 70 to 80 billion losses and at the same time, homeowners will have to deal with increased credit costs when obtaining new loans. 

Not all housing news is dire as one should look at their local real estate economy. While the news is not good on the housing front, Phoenix has been a HOT market lately and there appears to be a less supply of homes to meet the current demand. Our home prices are extremely low, investors have flooded the market, and rents are typically higher than the mortgage on most homes.

Confused yet?  To say that the market is volatile is not an understatement. Once again, as I have mentioned in the past, our economy and employment have to get back on track or we will not see any sustainable housing market trends.

I’m happy to share that the first quarter of the year showed a decline of property foreclosures.  However, the number is still a high rate of 28 percent of home sales.

RealtyTrac Inc. reported that most sales of homes were homes that already received a foreclosure notice or are currently being repossessed by lenders and this by far is the highest rate during the first three months of this year.  Does this mean that we are already on the rebound? Not so fast...

"It's an astronomically high number," said Rick Sharga, a senior vice president at RealtyTrac. "In a normal market, you're looking at the percentage of homes sold in foreclosure to be below 5 percent."  This just goes to show that we are still underway from getting back on the right track in the housing market.

Although the number of homes that are undergoing foreclosure has decreased, the number of houses that are facing foreclosure is still showing that the housing market in the US is still a long way before recovery. 

RealtyTrac says that from a percentage of 37.4 in 2009, foreclosure home sales went down 29 percent in 2010.  It means that a total of 158,434 foreclosure homes were sold in the first quarter of the year which is 16 percent lower than the total sales during the last quarter of 2010.  "Clearly, the housing market is not out of the woods," Sharga added.

In Arizona, foreclosure sales moved to about 45 percent of all home sales for the first quarter of this year which is down from 47 percent in 2010.  

The new legislation commonly known as the “Jobs bill” was passed as HB 2001during the 50^th Second Special Session focuses on making Arizona a more business-friendly state for large and small scale business. 

I guess since the State chose to remove the red light camera’s on the freeway, because it didn’t really yield the $$$$ I thought they thought it would...they have now decided that they will make money off homeowners who don’t really know their property taxes will go up, if they don’t take action and apply for a rebate! Since homeowners never had to do this before....what’s the chance that every homeowner will do it? More money in the State coffer folks! At the expense of ignorant homeowners!

That’s not all....Don’t throw that new affidavit in the trash when you get your Notice of Full Cash Value in 2012. That’s that notice of how much your property taxes are each year. You only have 60 days to submit or you will be disqualified for the tax rebate!

“The new affidavit requirements may be overlooked or mishandled by homeowners who are entitled to the rebate,” Tom Farley, CEO of the Arizona Association of REALTORS® said in the Senate testimony.  “They are going to throw it in the trash and the next thing they know their taxes will increase substantially,” he added.

Class Three properties get the rebate automatically without any hassle of application.  Homeowners will see if their property is included in the automatic rebate by looking for the words “State Aid” at their past year’s property tax bill.  However, under the new bill, second home or vacation home owners are now disqualified from getting the automatic rebate.

 This is a huge impact for homeowners as up to $600 a year could have been saved from property taxes depending on the home value.  Although homeowners can still qualify, they have to meet the state’s requirements in order to get the rebate. 

Despite the Arizona Association of REALTORS®’ concerns the Governor’s office of Arizona signed “Jobs Bill” into a law on February 17, 2011. This is a sad venture for homeowners as they go through the painful task of meeting all the required paperwork and potentially paying a higher property tax.  All this under the disguise of a “Jobs Bill.”

There is an unexpected trend of the slowing down of foreclosure activity on the West Coast. California-based ForeclosureRadar has released its market analysis which includes data movement of all foreclosure sales, foreclosure auctions, and pre-foreclosure notices.

Sean O’Toole, CEO and founder of ForeclosureRadar says, “The drop in filings, and the rise in cancellations, is surprising.  Banks have had time to resolve robo-signing issues, so we should be seeing exactly the opposite results, with lenders starting to catch up from recent delays.” 

Trustee sale filings went down to 27.9 percent in Arizona in April.  This by far has been the lowest since ForeclosureRadar started tracking the foreclosure activity in Arizona in August of 2009. The research also shows that the Trustee sale notices were lower compared to the filings in April 2010.

There was also a 22.2 percent drop in Arizona homes which were taken back by the banks as REOs.  This means fewer properties were scheduled for foreclosure and filings went down to 10.6 percent. 

This stalling of foreclosures has impacted our local housing market. We currently only hold a 3.5 month inventory of homes on the market. This is quite below what we need for all the buyers in the market. If so many sellers were not under

water, this would be a HOT seller’s market. However, many of the sales are distressed sellers with no equity. In our market, it’s tough to be a seller and it’s tough being a buyer. You will need lots of patience and a skilled and experienced Realtor to get you through this current housing process. Please call me if you have questions on how to successfully buy or sell a home!

A drop at foreclosures for the second month in a row now was reported by Arizona State University reports a new Phoenix-area home foreclosure study. 

Jay Butler, an ASU real estate studies professor, does a monthly report and shows that the existing home sales foreclosure percentage has dropped to 36 percent in April.  This is good news in comparison to the March foreclosure percentage of 38 percent and far better than the whooping January and February activity of 43 percent. 

In April, about 3,800 were foreclosures out of the 10,300 existing homes sold.  While in March, out of 11,000 sales, 4,100 were foreclosures. 

Foreclosures still remain high because many homeowners have used all their resources to remain in their home. There is still the possibility of another wave of foreclosures as many foreclosures have been stalled due to legal issues with robo-signing and banks are now reviewing their foreclosure process for legality.

There has been a trend that banks are taking longer to foreclose due to loan modification and short sale attempts made by the homeowner. The majority of these homeowners are distressed and not making payments on their mortgage.

The current median sales price is still at $125,000 for a non-foreclosed home.

Fannie Mae seeks $8.5 billion from taxpayers - Really? I vote no! Why? Let's see...

I am a short sale listing agent in the Phoenix market. Fannie Mae and Freddie Mac are the biggest investors we have behind our deals. They are also a major roadblock to a successful short sale. Arizona is a non-recourse state. This makes it impossible for a lender to come after a borrower after the Trustee Sale on the first mortgage. It applies to second mortgages, too, if they are purchase money mortgages. However Fannie Mae has taken the position of requiring cash contributions and promissory notes from most of the sellers despite knowing the seller won't get anything in foreclosure. More times than not, if the seller does not agree, the home goes to foreclosure. Now, Fannie Mae has a BIGGER loss for no reason at all. Is Freddie Mac any better? No, not only are they stuck on outrageous promissory notes at closing (seems $31K is their magic number), they stick to their guns about not postponing an auction date. Just this week, I have a seller whose auction date is next week. Bank of America is the servicer and they took five months to process the short sale! After finally getting approval for the short sale, we needed an extension on the foreclosure date. Freddie Mac just came back this week with a $12,000 price increase because we needed a 30-day postponement of the trustee sale. That buyer got fed up and walked. I got a new buyer who is willing to pay the increased amount but now, Freddie Mac will not postpone the auction date because....drum roll....the buyer is a VA home buyer and may need 45 days to close versus the 30 days. Nice bird you just flipped to our Veterans, Freddie Mac!

Take the safety net away folks! They are FORCING homes into foreclosure when it doesn't make any financial sense at all! Why? Because we, the people (read = taxpayers) who live in the communities they are destroying with all their foreclosed homes are there to foot the bill for their bad decisions. When you don't have to pay for your financial mistakes, you don't really care if you don't make sound financial decisions, do you? If we, the people (read = taxpayers) are to give any more money to these failed institutions, then it should be mandatory that they approve ALL short sales when it makes better financial sense than foreclosing.

Why the blank check with no strings attached? Why isn't the Federal Government mandating these two institutions exhaust all short sale potential before foreclosing? Listen, I do short sales every day of the week but Fannie and Freddie are not doing all they can to minimize the losses they are incurring. You have to ask yourself...Why?

Tonia Vickery
Short Sale Specialist

Not every market is struggling. The truth is that many desirable neighborhoods and zipcodes are still experiencing healthy inventory levels and conditions that promote multiple offers. As a buyer in these markets, how can you be competitive

First, and perhaps most importantly, be ready to buy. Readiness is not impulsiveness, however. Before you begin your home search, be clear on your objectives. This means knowing your budget (and how much wiggle room you really have), what amenities are must-haves, and what things you can do without.  The rest will follow!

When you're ready to buy or sell in or near Phoenix, Arizona, give me a call.  Let me show you why MY experience isn't expensive...it's priceless!

~Tonia Vickery

Ready or Not, Here It Comes! Revamped Foreclosure Procedures Around the Bend

The New York Times is reporting that the country's top mortgage servicers are finally agreeing on changes to their foreclosure procedures.

Some of the changes include:

• Having a third party oversee more of the foreclosure process, including evictions which will be handled by law firms.
• More training for foreclosure staff.
• Home owners who are defaulting on their homes will have one point of contact.
• A thorough review of foreclosures that have occured in the past two years, in search of any foreclosure that should not have occurred or excessive fees that homeowners were forced to pay.

These all sound like they will substantially alter how foreclosures are handled.  You can read the entire article here on The New York Times online.

If you are having a difficult time maintaining your mortgage payments, or need someone who can tell you your options, give me a call.  Let me show you why MY experience isn't expensive...it's priceless!

~Tonia