A Moratorium on Foreclosures....What Does It Mean?

This past weekend, Bank of America announced that it is placing a temporary moratorium on foreclosures. What does this mean? It means that those homeowners who have received their Notice of Trustee Sale from Bank of America due to non-payment of their mortgage, may not have their homes auctioned any time soon. This does not mean that all Bank of America customers can stop making their mortgage payments without consequences. It simply means that those homeowners who have imminent auction/foreclosure dates have received a postponement of the inevitable.

Other lenders such as JP Morgan Chase and GMAC Mortgage, have announced a moratorium on foreclosures in 23 states. Arizona is currently not included on this list. Why the moratoriums? It has come to light in a court of law that lenders are not paying close attention to the homeowner's documents and that many bank officials are overwhelmed by their workloads. Consequently, they are not diligently investigating before approving foreclosures.

These moratoriums do currently not affect short sales. Short sales are proceeding as usual.

If you have any questions regarding alternatives to foreclosure, give us a call at 623-694-0354. We are here to help you through a difficult time with grace and dignity.

FORECLOSURES ON HOLD? COULD THIS BE TRUE??

In the past several weeks, JP Morgan Chase, GMAC Mortgage and Bank of America have placed foreclosure filings on HOLD in 23 states. Currently, AZ is NOT one of these states.
In a February deposition in Mass., a Bank of America Executive said she signed as many as 8,000 foreclosure documents in a month without reviewing them. The statement was taken by lawyers for homeowners contesting the seizure of their homes.
Why not in AZ? The 23 states where the foreclosure holds are taking place require a court order before a home can be seized. This requires more extensive documentation before they can foreclose. AZ does not have the same foreclosure procedure.
HOWEVER,with the upcoming elections, this has become a hot issue for politicians. Perhaps they may mandate Federal Guidelines to ease the foreclosure crisis. Stay tuned.................

Forced to Relocate......

Lately we have been getting quite a few calls from homeowners who have been notified by their employers that they are scaling back or shutting down their Phoenix operations. This leaves homeowners with equity in a quandry. Should they sell at the current market price and barely break even, or in some cases, bring money to the table at closing OR should they hang on to their house and rent it out?
Obviously, circumstances vary from homeowner to homeowner. Being an out of state landlord can supply a nice flow of cash...if the rent adequately covers the mortgage payment and HOA dues, etc. But, if you are waiting for prices to return to the '05 prices, you will need to rent your property for a very long time. (i.e. at least 10-15 years)
It is best to look at the real estate market you are moving to and see how prices are there. If you sell your AZ property at a slight loss, but are able to pick up a great bargain in your new locale, then it may be worth bringing a few dollars to the closing.
Also some owners do not have the temperament to be a landlord. If you are the type that is bothered by a scuff on the wall or a few leaves in the yard, then you will probably be an agitated landlord. And, some things are just not worth the aggravation.
We are finding that the majority of those relocating are moving to Washington State and Oregon. In this case, the grass is greener where it actually takes minimal effort to grow.

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans: "In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, wi..."

Fannie Mae Backed Mortgage Loans

In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, willing, able buyer who is paying fair market value for a short sale property. This makes no sense to me because Fannie Mae is a government backed loan.
In almost every case, Fannie Mae would receive more money from the completion of the short sale. But, no, Fannie Mae refuses to extend the auction date so the short sale can be completed. Instead, they force the homeowner to go into foreclosure. When the house forecloses, the lender needs to take the house back and care for it. Now the lender needs to pay for the utilities,the lawyers, the pool service, the landscape service, and the commissions for the realtors involved in the new sale. Typically, the house comes back on the market for a lower price than what the short sale buyer was willing to pay. So, in the foreclosure, Fannie Mae receives less in the foreclosure sale than they would have received if they had waited a few weeks and completed the short sale. And,the foreclosure closes typically 3-4 months later than the original short sale closing date.
When Fannie Mae agrees to take this greater loss, who is the big loser. WE ALL ARE. The Fannie Mae loan is government backed. That means that loss increases our US deficit. Ultimately, you and I will pay for this loss thru our taxes.
We can only fight this process by contacting our US representatives and by voting for those politicians who are willing to fight for us and stop increasing the national debt.

Yea for Luke AFB !!!

Kuddos to the government for selecting Luke AFB as the number one site for the new F35's. It looks like Luke AFB will continue to bolster our local economy. We are very thankful for our local service personnel and think of freedom every time we hear a jet pass over.
Also, soon Luke AFB will have the largest solar plant on government grounds in the US. APS will be building this solar operation and upon completion it is expected to service over 3750 homes. Finally, we are using our most plentiful, free resource in Arizona...the sun!
Go Luke AFB! You Rock!!

DO FORECLOSURES HURT HOME VALUES???

A recent study by a MIT economist and 2 Harvard researchers concluded that a foreclosure reduces that home's value by an average of 27%. " In the study, “Forced Sales and House Prices,” which will be published in the American Economic Review, Pathak, Campbell and Giglio examined 1.8 million home sales in Massachusetts from 1987 to 2009. By looking in granular detail at real-estate prices, the researchers have concluded that a foreclosure reduces the value of a house by 27 percent, on average."

So, if my neighbor's house is foreclosing, will this affect the value of my house?
YES, The study concluded that a foreclosure reduces the surrounding home's values by an average of 9%. A bankruptcy in a neighborhood reduces the surrounding home's value by an average of 3%.
Short sales, a transaction in which the property can avoid becoming vacant, is increasingly sought after as a solution not only for homeowners facing foreclosure, but lenders looking to recoup more of their investment.
Interested in a Short Sale? Call me at 623-694-0354.