I imagine this is rare, but it has come up more than once when a homeowner is faced with the point today where they can no longer afford their home or it no longer makes sense to keep paying on [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]>

What do you do if the homeowner just doesn’t want to sell their negative equity home?

I imagine this is rare, but it has come up more than once when a homeowner is faced with the point today where they can no longer afford their home or it no longer makes sense to keep paying on a negative equity home. They contact you, the Realtor and their Trusted Advisor, to explore options. For the most part those options have consisted of a Short Sale, trustee sale/foreclosure or loan modification exercise that ultimately fails to fix the problem. But, what if a homeowner could keep their home and owe no more than what its current resale value is? We are not talking principal reduction.

We are now late in the cycle of the mortgage crisis. First were the defaults of the sub-prime loans.  Then came the Alt A loans.  Now we are seeing the defaults of prime loans. With unemployment and underemployment high there is no relief in sight. At this point, these homeowners have tapped their savings and assets. The homeowner has run up their credit cards and now find themselves in dire financial straits. A short sale would be a great solution but they just do not want to or feel they cannot leave their property. Now there is a solution.

 The last resort, using the biggest hammer available, also has the greatest social stigma…Bankruptcy. At this point the homeowner feels sick but, we are not talking everyday consumer bankruptcy. Current bankruptcy laws allow, in a strategic fashion, for the stripping of any negative equity subordinate lien. In other words, releasing the second or third mortgage from the property so that it is unsecured. Next the bifurcation or splitting of the remaining first mortgage into a secured portion that is up to the value of the property and an unsecured portion that is above that value and lastly, the discharge of all unsecured debt including the unsecured portions of the mortgage. The result is that the homeowner may be relieved of the residue of this mortgage crisis. They now will own a home with what should be an affordable payment and owing only what the home is currently worth. They now have the ability to restore their credit or to get some time under their belt to re-establish their credit.

With HAMP a failure and the weight of short sales and the subsequent reductions in home values, tough solutions must be considered. Not every homeowner should consider the bankruptcy solution but, the option is available.

For questions or comments about this or other articles please visit our

blog.  blog.MortgageMediationGroup.com

Doug Farnham (Central/Southern AZ)

(602)774-3753

DFarnham@ThomsonLawPLC.com

 

Bob Verbic (Northern AZ)

(928)899-5765

BVerbic@ThomsonLawPLC.com

 

www.MortgageMediationGroup.com

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 If you are working with a client who has had a short sale or a deed-in-lieu in their past…or you are listing a home and your sellers may have the same issues…Fannie announced new waiting periods, as of July 1, [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]>   from Rebecca Roberts, Mortgage Banker with The Lending Company, Inc.

Advising Short Sale and Deed-in-Lieu Clients 2010

 If you are working with a client who has had a short sale or a deed-in-lieu in their past…or you are listing a home and your sellers may have the same issues…Fannie announced new waiting periods, as of July 1, 2010, before being eligible for another loan.  The waiting period is defined as “from the date of the pre-foreclosure to the date of application”.

• Fannie defines ALL Pre – foreclosure events as any one of the following:
• Deed-in-Lieu
• Preforeclosure Sale
• Short Sale
                                                                                   
• Full Foreclosure retains a 5 yr waiting period

 New Waiting Periods Effective July 1, 2010

For extenuating circumstances, for all 3 event scenarios, it’s a 2-year waiting time and 90% LTV.

Rebecca Roberts    Mortgage Banker
The Lending Company, Inc.
6910 E. Chauncey Ln. Ste. 220 Phoenix, AZ 85054
Phone: 602-791-6262                Fax: 866-559-9097
License: NMLS #231543 – BK0909441
rroberts@thelendingco.com
www.thelendingco.com
                                                         

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Hi All: Today, I’m going to show you how the government’s moratoriums and loss mitigation programs have affected foreclosures and shadow inventory.  

Shadow inventory is made up of all the properties that are in foreclosure or headed toward foreclosure that haven’t hit the market yet. There are 7 [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]> An interesting email I received from Stan Van Dyk of Cash Funding Options:

Hi All:
Today, I’m going to show you how the government’s
moratoriums and loss mitigation programs have affected
foreclosures and shadow inventory.  

Shadow inventory is made up of all the properties that are
in foreclosure or headed toward foreclosure that haven’t
hit the market yet. There are 7 million homes in this shadow
inventory category.  What the government isn’t telling you
is that their moratoriums and loss mitigation programs
created a huge surge of foreclosures that are about to pop.

Their effort to decrease foreclosures has backfired.

According to the National Association of Realtors, there
were 3.6 Million unsold homes in September. You think there
are a lot of homes on the market now? There are 7 Million
more coming that the government has created in this shadow
foreclosure inventory. That’s 2 times the amount of homes
that are currently on the market now!

The government’s Making Home Affordable (MHA) modification
program and FHA’s Hope for Homeowners refinance program DO
NOT WORK for borrowers that are too wealthy or owe too much
on their homes. The number of foreclosures for high end and
luxury homes in increasing and there are a ton of luxury
homes in this shadow inventory.

So what does all of this mean to you as a real estate
investor?

Opportunity, a lot of opportunity to help high-end
homeowners by offering them a short sale while making a
killing in the process.

So when can we expect to see the surge in foreclosures from
this shadow inventory?

We are in the first phase of shadow inventory right now and
it will continue into 2010. The second wave will start in
2010 and will continue into 2011 because the national
foreclosure moratoriums ended in March and the government
intensified its HOPE NOW Alliance program as well as its
Home Affordable Modification Program (HAMP). These programs
were released in the first week of March but the problem
was that the servicers and lenders did not receive training
until the middle of June. Then, the programs had to be
updated because they weren’t effective and they became more
complicated to implement effectively.

This created a huge amount of people that have not paid
their mortgage and their houses have not been taken back by
the lenders yet. Basically the government only delayed the
inevitable foreclosure process but they made it worse
because all of the homes will be entering foreclosure at
the same time and with more debt owed on the mortgages.  

This is the ultimate short sale environment. These homes
are ripe for the picking. Many of these homeowners have thrown
their hands up and have vacated the houses. These vacant
houses are gold for you as a real estate investor.

The third phase of shadow inventory will be borrowers that
have exhausted their options on long term government
sponsored payment plans, forbearances, and failed
modifications. These will show up in 2011 and continue into
2012 as their foreclosure timelines were delayed or reset
by the latest HAMP efforts.

As you can see, the biggest mass of foreclosures hasn’t
even hit us yet!

Call us to see how you can help and profit from the the credit and housing crisis.

Thank you,
 
Stan Van Dyk  – Managing Partner
Cash Funding Options
4625 S Lakeshore Dr Tempe, AZ 85282
888-341-3802 Toll Free    602-314-1025 Office   480-516-4364 Cell
480-240-1316 e-Fax
Stan@CashFundingOptions.com  http://www.cashfundingoptions.com/

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This week appears to be a good news/perhaps not so good news week in the market.

The good news is that the totals for notice of trustee sale for the month of January are in. In Maricopa County 6,762 notices were served [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]> Courtesy of Barb Savoy-Pacella ABR, CNRS, CHMS
Director of Business & Career Development
Keller Williams Arizona Realty

This week appears to be a good news/perhaps not so good news week in the market.

The good news is that the totals for notice of trustee sale for the month of January are in. In Maricopa County 6,762 notices were served in January, which is the lowest number since November of 2008.

However, in reviewing the market for the past week, we are observing an increase in listings (typical for this time of year), and the first sign of slowing pending sales. The slowing is not dramatic, but something that we will obviously be observing.

Overall, price per square foot increased by $.52 cents for the month of January, bringing overall depreciation from -16.7% to -1.9%, but if pending sales remain slow, that could change.

Current Conditions in the Phoenix Market:

* There are 27,494 single family detached homes actively for sale in MLS. That is an overall increase of 46 listings from last week.
* There are 35,102 total homes (including condos, patio homes, town homes and lofts) actively for sale in MLS.

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8-10-09

 Please visit my website www.GreatScottsdaleLiving.com  for updates.

 There has been lots of noise about SR-1271 of late. It is scheduled to become effective the end of September. This is a new law intended to assist small community banks that did not receive TARP funds. See [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]> Courtesy of  Tim L. Greenfield, Associate Broker, ABR
Coldwell-Banker Residential Brokerage  Scottsdale Arizona

8-10-09

 Please visit my website www.GreatScottsdaleLiving.com  for updates.

 There has been lots of noise about SR-1271 of late. It is scheduled to become effective the end of September. This is a new law intended to assist small community banks that did not receive TARP funds. See Tom Farley’s (CEO of AAR) comments below  

Anti-Deficiency Law Update:
“SB 1271 has been getting a lot of press lately as it will have serious and unintended consequences for many real estate owners facing foreclosure in Arizona. In light of this the original sponsor of the bill, Senator Steve Pierce, has asked the legislature and the Governor for an immediate repeal of the law which is slated to go into effect at the end of September. The state’s original anti-deficiency language has been inserted into two budget bills (HB 2008 and SB 1024) currently being debated by the legislature which would have the effect on nullifying the passage of SB 1271. HB 2008 has quickly passed the Arizona House of Representatives. SB 1024 is awaiting final vote which could happen August 8th or on the 10th. If for some reason, the Senate Bill fails on final vote, we will immediately focus on our next effort to repeal the law. The banking lobby and at least one member of the legislature are pushing for an amendment to SB 1271, instead of repeal, that would allow it to still apply retroactively to loans already in existence. We have been advised that this action would ultimately be unconstitutional. Stay tuned for more updates on our efforts to repeal SB 1271 through the bills cited above. 

 Backgrounder: 

SB 1271 – Serious Changes to Arizona’s Anti-Deficiency Statute

SB 1271 was sponsored by Senator Sylvia Allen, a REALTOR® from the White Mountains area of our state. The legislation started out in January as a bill dealing with jail districts and property tax limits. In June a strike-everything amendment gutted the original bill and changed its direction entirely. The Arizona Bankers Association argued successfully that the changes provided in the legislation were necessary because abuses in the current law were costing Arizona-based banks millions in losses. There was significant sympathy for the Arizona community banks in making the changes provided by this legislation. In other words, the legislators found it very easy to hold property investors liable for their debts while arguing that homeowners would still retain their deficiency protection if they lived in the home for six consecutive months. The legislation sailed out of the Senate by a unanimous vote but just barely received enough votes to pass the Arizona House of Representatives. The Governor signed the bill on the last day to sign or veto the legislation. 

The current law – Arizona Revised Statutes (A.R.S.) § 33-814 currently states that within 90 days after the date of sale of a trust property under a trust deed, a legal action may be brought to recover a deficiency judgment against the borrower (trustor) who has now had their property foreclosed. The deficiency judgment must be for an amount equal to the sum of the total amount owed as of the date of the sale either by the fair market value of the trust property as determined by the court or the sale price at the trustee’s sale, whichever is higher. The current law prohibits a lender from seeking a deficiency judgment against the trustor (foreclosed property owner) if the trust property is 2.5 acres or less and is used as a single one-family or single two-family dwelling.

Stay tuned to see how this plays out at www.GreatScottsdaleLiving.com. 

TLG

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Request for the Governor’s Assistance

On Friday, the Arizona Association of REALTORS® (AAR) had a preliminary conversation with Governor Brewer’s staff regarding the impacts of SB 1271 and [...] No related posts. Related posts brought to you by Yet Another Related Posts Plugin.]]> Reprinted from an Email Blast sent to members of the Arizona Association of REALTORS®

from an Email Article By Tom Farley, CEO
Arizona Association of REALTORS®   Read the FULL article at  http://www.rallinow.com/issues/show/60

Request for the Governor’s Assistance

On Friday, the Arizona Association of REALTORS® (AAR) had a preliminary conversation with Governor Brewer’s staff regarding the impacts of SB 1271 and the need for an immediate fix to this legislation that becomes effective on September 30, 2009. AAR requested that the Governor amend her current Call for Special Session to include a fix to SB1271 with an emergency clause. Governor Brewer called the legislature into Special Session to deal only with the historic budget deficit. The Governor’s staff was receptive to our request and voiced a wiliness to work with AAR, but requested that we provide specific examples of legal issues resulting from SB 1271’s passage and how the bill would impact Arizonans if left unfixed. The Governor does not have to amend her Call for Special Session to include this issue, so the burden is on us to demonstrate the need for immediate action. If the Governor agrees with our request, our next job is to convince the legislature to fix the statute.

Early next week, AAR will deliver a letter outlining the issues as requested to the Governor’s office and formally make the request to amend the Call for Special Session to include this issue. Our goals are to narrow the bill’s impact, clarify the statute’s intent and to include an emergency clause in the legislation so that the AAR’s amendments would take effect and overwrite the amendments that SB 1271 made to the Anti-Deficiency statute before it goes into effect on September 30, 2009.

SB 1271 – Frequently Asked Questions (FAQ) Document in the Works

We have received numerous emails and phone calls asking several different questions regarding SB 1271’s interpretation. We are doing our best to provide those answers in an FAQ document. But because of several different views by attorneys across our state on how the changes to the statute should be interpreted, AAR is having difficulty providing those answers.

Keep up with the current issues and UPDATES posted on www.rallinow.com, AARNews, AAR’s FaceBook page and in our upcoming electronic association newsletter. Follow the Arizona Association of REALTORS on Twitter!

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