From USAToday.com:

When Sharon Sakson was laid off recently from her job as a television writer and producer, she burned through her savings to pay the $2,400 monthly mortgage on her home. But she soon decided it didn’t make sense: Her home was worth thousands less than the mortgage she carried on it.

The home had been appraised at $390,000 when she refinanced in 2006, but she estimates it’s not worth the $320,000 it initially cost in 2004. So Sakson did what a growing number of homeowners are doing today: She stopped paying and decided to let the bank take her home.

What Sakson did is called a strategic default, or a voluntary foreclosure, and it’s fast becoming a major challenge to the government’s $75 billion effort to keep distressed borrowers in their homes. Walking away from a mortgage is serious business — it can knock 100 points off your credit score and make you ineligible for a new mortgage for seven years. Yet, about 588,000 borrowers walked away from homes last year, double the number in 2007, according to a recent study by credit-scoring firm Experian and management consultants Oliver Wyman. While home prices are rising, the increases pale compared with overall drops in home prices since 2005 that threaten to push millions more homeowners into Sakson’s predicament, owing more than their homes are worth and seeing little chance of rebuilding equity soon.

Make sure you read the rest of the article. We get a lot of calls everyday from people in this same situation. I would never suggest someone simply walk away from their home. If someone was to do a Strategic Default it should be for the benefit of completing a loan modification or a short sale. There are times when a bank will refuse to accept either of those options, unless the owner goes late.

If you are considering walking away from your home, or are running through your savings to keep up on your payments, please don’t wait to give us a call: (480) 389-5199 We can help you understand what all of your options are. Call us today.

Post from: The Phoenix Real Estate Guide

Phoenix Real Estate: More People Area Walking Away From Their Home

This just in from The Phoenix News Times:

Banks Suing Governor over Reversal of Controversial “Anti-Deficiency” Law

Remember when we wrote about a bill that could financially devastate homeowners facing foreclosure? Remember when they reversed the bill?

Well, it might just be back.

Last Monday, the American Bankers Association — which represents more than 70 banks in the state — filed a lawsuit with the Arizona Supreme Court against Governor Jan Brewer, challenging the constitutionality of how the Legislature reversed controversial Senate Bill 1271.

Specifically, bankers are requesting that the court reverse Section 17 of House Bill 2008 –the exact same section that reversed Senate Bill 1271.

The essence of banking lobby’s case hangs on how 1271 was reversed. Brewer signed a bill reversing SB1271 in a special session. Because the bill reversing 1271 was unrelated to the four topics Brewer listed when calling the special session, the Arizona Banker’s Association says the reversal was unconstitutional, according to its petition.

It also argues that the entire house bill — one of nine sections of the long-awaited budget — may very well be unconstitutional. According to the Arizona Constitution, bills should stick to one topic. But, the petition argues, HB 2008 addresses many different issues (including 1271) that are not remotely similar.

Real estate lawyer Jim Eckley — a vocal critic of 1271 — calls the lawsuit absurd.

This could cause a lot of problems for the already troubled Phoenix real estate market.

Post from: The Phoenix Real Estate Guide

Phoenix Real Estate: Could Senate Bill 1271 be re-reversed?

From RealtyTrac: U.S. FORECLOSURE ACTIVITY INCREASES 5 PERCENT IN Q3

RealtyTrac® … today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.

Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.

Arizona posted the nation’s second highest state foreclosure rate in the third quarter, with one in every 53 housing units receiving a foreclosure filing, and California posted the nation’s third highest state foreclosure rate, also with one in every 53 housing units receiving a foreclosure filing during the quarter.

If you are the 1 in 53, don’t wait any longer. Give us a call to see if there can be some relief for you. We help people everyday with Loan Modifications and Short Sales. (480) 389-5199 Let’s get a game plan together to help you get things right.

Post from: The Phoenix Real Estate Guide

Phoenix Foreclosures: 1 in 53 Homes Received a Foreclosure Notice

From the Phoenix Business Journal today:
“Two-thirds of the homes sold last month were either new foreclosures or resales recent foreclosures, according to the September Realty Studies report from the W. P. Carey School of Business at Arizona State University.”

“Although the level of activity appears strong, the market is being driven by either homes being foreclosed or being sold back into the market by the lender,” said associate professor of real estate and report author Jay Butler.”

Phoenix foreclosures are not going away. They will continue to affect the value of your home.

“About 6,100 Phoenix-area resales and 2,900 foreclosures were recorded in September compared with about 6,000 resales and 3,100 foreclosures in August. In September 2008, however, the market recorded only about 4,600 resales and 3,650 foreclosures.

Declining prices, especially in the lower end of the market, have piqued investor and homeowner interest, Butler said. The median single-family home price in September was $140,000, up from $138,000 in August, but below $180,000 in September 2008.”

Post from: The Phoenix Real Estate Guide

Phoenix Foreclosures Wont Go Away

Does this sound stupid to anyone else? I have yet to work on a short sale where the hold up was the seller (The lien holder is a different story). How would that help move things along?

And if you were a lien holder taking a $100,000 loss on an asset, how would your servicer getting an extra grand out of the deal help you cope?

If you want some honest help in getting your Phoenix Short Sale or Phoenix Loan Modification completed quickly

Post from: The Phoenix Real Estate Guide

Stupid Idea of The Week: How To (Not) Close More Phoenix Short Sales

Luxury Foreclosures in Phoenix are everywhere! Take a look at the latest Luxury Homes In Phoenix below, then head over to our search page to find the Luxury Foreclosure that you are dreaming of!

Post from: The Phoenix Real Estate Guide

Phoenix Luxury Foreclosures

Both options give you a great opportunity for saving a BUNCH of money. The major difference between the two is the time frame. I have worked on a short sale deal for over 8 months before it finally closed. I have also worked on one for about 7 months when the bank decided it would rather take the home back then sell it and foreclosed on the home (by the way, it went up for sale 2 weeks later as a bank owned home for $20,000 less then the offer they previously rejected. Man, that was a fun day when I found that out).

Short Sales: Yeah, more like LONG sales! (Get it?!?! What a great joke…)
So they take forever. The bank will not assign the file to a loss mitigator until they have an offer on the home. Not that big of a problem, except what if the offer is $50,000 then the bank is willing to take? Well, you won’t know for 2 months. They have to assign someone to the file (2-4 weeks). Then that person has to order a broker price opinion (2-4 weeks) then you have to wait for the bank to hear back from the agent (1 week) and then they have to make a decision on your original offer (2-3 weeks). And honestly, that timeline is if the bank is on top of things.

I have worked with a bank where they claimed the file was moved to another department. That dept said they didn’t have it. After 2 months of playing phone tag to see who has the file, the original person we talked to had it. Seriously. We’ve also seen banks lose a file after having been submitted 5+ times. And if they are missing one page? They told us to resubmit the entire 50+ page file, not just the one they were missing.

Rant Over.

Bank Owned Properties: (I don’t have any good jokes for this one )
Once the property moves from the short sale department to the reo department, things seem to improve greatly. Here is my theory: The Short sale department is charged with getting the most they can for the property, the reo department is charged with getting the bad asset off their books.
Remember the home from before? My guess is that the reo department saw that it had been listed for over 7 months without selling (never mind, that they had plenty of offers) so they assumed that it had to be worth much less then it was currently listed for.

The benefit with working on bank owned properties is that they already know how much they are willing to take. For the most part they are listed where the bank KNOWS it will move. They KNOW they can get a few offers in a few days at that price. Write the offer, sign their required paperwork, and you can close in about 45 days.

Post from: The Phoenix Real Estate Guide

Short Sales vs Foreclosures

So what exactly is a foreclosure? The foreclosure process allows lenders and other lien holders the ability to recover the amount on a defaulted loan by selling or taking ownership of the property that was used to secure the mortgage.

See Also: Short Sales vs Foreclosures

Court foreclosures begin when the lender files for foreclosure in court and records a notice of the pending lawsuit (Lis Pendens). The court filing includes the debt and default amount. The borrower and any junior lien holders are notified either in person or by publication. If the borrower does not respond to the court action, the court can rule against them and set the amount owed to the lender. The county clerk then directs the county sheriff to conduct a sale of the property to recover the amount owed.

An out-of-court foreclosure sale may occur if a clause in the trust deed permits the lender to sell the property if a borrower defaults. To start the foreclosure, the trustee records a notice of sale, and the sale occurs at least three months after the notice is recorded. Until 5:00 p.m. the day before the sale, the borrower or any junior lien holders may stop the foreclosure by paying the default amount, fees, and costs.

The foreclosure process can end one of four ways:

1. The borrower/owner pays off the default amount to reinstate the loan during a grace period known as pre-foreclosure.
2. The borrower/owner sells the property to a third party during pre-foreclosure, allowing the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
3. A third party buys the property at a public auction at the end of the pre-foreclosure period.
4. The lender takes ownership of the property, usually with the intent to re-sell. The lender can take ownership through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction.

The foreclosure process offers three bargain-buying opportunities:

1. Buying during pre-foreclosure (short sales)
2. Buying at public auction
3. Buying bank-owned properties (also know as REO properties)

This post will focus on the third stage: Buying bank-owned properties

4 Steps to Buying a Foreclosure

Step 1: Create a Plan

Many people begin the process of buying a foreclosure or short sale buy looking for the house. This will usually lead to heartache. Generally, you can get a pretty good deal on foreclosure properties. The problem is that every buyer knows this. These types of properties have A LOT of competition. When homes go fast like this, you need to be prepared.

When we meet our clients to prepare a plan, we want to make sure we have all of our bases covered. Yes we talk about what type of home you are looking for, but we also need to make sure your financing is lined up and ready to go. That way when we submit an offer to the seller (the bank) they know that we are serious and solid about buying.

See Also: Create your real estate game plan

STEP 2. Find a Property

Watch the video on how to find foreclosures for sale

When you start your search for foreclosures, it helps to get as specific as possible.

See also: Needs vs Wants

Our system allows you to search specifically for homes that are already bank owned or are in the short sale process. Of course you don’t have to choose this option but it helps to know how motivated they are (side note, if they are trying to sell in this market, you KNOW they are motivated!). You can narrow your search down by city, zip, school district, etc. You can even lock the map into place and only search for homes in the visible area. This is really helpful when you know that you want to be close to work, a park, or anything else!

Of course you also always have the ability to search by number of beds and baths.

Once you have the search you want, you can save that search by creating an account. The benefit here is the updated email that goes out daily. This way you can be the first to know about the new listing that meets all of your criteria! The email will also keep you aware of price drops, so when your perfect home falls in to your price range, you can be ready to move!

See also: Why register for an account?

STEP 3. Get Financing

You actually begin this process right away. You don’t want to begin your search and then find out you don’t qualify for that amount. Once you know your price range and have the pre-approval letter in hand, you can start making offers on properties. As I mentioned before, this pre-approval letter basically tells the world (or sellers at least) that you are a serious buyer and you are not just jerking them around.

See also: How do I buy this home?

STEP 4. Making an Offer

OK, so here is where it actually gets fun. When making an offer on a foreclosed home, speed is the name of the game. I have seen MANY buyers miss out on the perfect home because they waited too long to pull the trigger.

Earlier this spring, my sister bought a home back in Oregon. The home had been on the market 6 months with no offers. She drove by the home and called me over. We walked through the house and wrote an offer up that night. Sellers accepted the next day, and by the weekend (3 days later) they had 2 back up offers. One actually would have netted the sellers more money. That couple had looked at the home 5 times over the previous 3 weeks. By moving quickly, my sister got a good deal, and the other buyers missed out.

The offer will include a copy of your pre-approval letter, and a copy of your earnest money check. Here is where we play our hand. Many buyers HAVE to feel like they are getting a deal on a property. I completely understand that, but remember that there may be other buyers waiting in the wings to make an offer. Know the neighborhood stats before you start looking. That way you know when a home is listed at $90 a square foot and the mean is $115 you are getting a GREAT deal. Then you don’t have to push for $75 per square foot and possibly lose out. The offer that gets accepted is going to make you feel good and the seller feel good.

See also: From contract to close: buying a home in Phoenix

Post from: The Phoenix Real Estate Guide

How To Buy Phoenix Foreclosure Properties