Buying Arizona Real Estate » foreclosure

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

Tony Pomykala — Sat, 02 Oct 2010 15:29:51 +0000

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.

Thomson Law, PLC is a full service law firm and has added to its practices a Strategic Bankruptcy Practice focused on assisting homeowners in this situation. We believe that Bankruptcy should be the last option but should not be dismissed from the discussion of options. If you have a client that faces a point today that can no longer afford their mortgage and owes more than their home is worth please call Thomson Law today. We will sit down with them discuss their situation so that all of their legal rights and obligations are understood so that they can make good decisions for their family.

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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The Phoenix Real Estate Weekly 5/28/10

Barb Savoy — Fri, 28 May 2010 19:02:16 +0000

Courtesy of Barb Savoy-Pacella ABR, CNRS, CHMS ~ Director of Business & Career Development, Keller Williams Arizona Realty www.PacellaGroup.com

There are many variables that can effect what seems to be our continuing ascension from what appeared to be the bottom, such as, “strategic default” by Alt-A borrowers; the expiration of the home buyer tax credits; and any other economic news that could cause buyers to have lack of confidence; however, setting the crystal ball aside and evaluating data for today, it would appear that with the exception of the luxury market, all other areas of the Valley are seeing improvement over this same time period last year.

Days of available inventory and days on market have decreased 20% over the past year, and although appreciation has been bouncing around over the past few weeks (as high as almost 10% and as low as 5%) this week Valley wide appreciation is at 7.4%.

Please view the two columns below to see the year over year appreciation by major city:

2009 2010

Cave Creek -22.6% -3.7%

Chandler -23.1% -0.8%

Fountain Hills -24.8% -5.9%

Gilbert -19.9% -4.1%

Glendale -44.8% 12.2%

Paradise Valley -13.2% -21%

Peoria -26.1% -2%

Phoenix -51.8% 23.1%

Scottsdale -21.9% -11.6%

Current Conditions in the Phoenix Market:

There are 26,374 single family detached homes actively on the market in MLS. That is an increase of 152 listings for the week and the second week in a row that we’ve observed an inventory increase during a time period when we would normally see decrease.
There are 33,489 active listings in MLS, which includes patio homes, town homes, condos and loft properties.

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The Phoenix Real Estate Monthly 5/14/2010

Barb Savoy — Sat, 15 May 2010 02:11:36 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director Business & Career Development ~ Keller Williams Arizona Realty

The Phoenix market certainly has it’s ups and downs, but one thing has been VERY consistent over the past year. Properties listed over $400,000 only account for 7% of what has been selling for the past year. In the month of April, 73% of all properties sold were listed under $200,000; and approximately 20% of what sold was in the mid-range between $200,000-$400,000.

Has the market hit bottom? The median sales price has fallen 52% from the market high of June 2006, however, it is up 10% over this same time period last year.

Equity sales held 40% of the inventory that closed in March, matching the 40% held by REO sales, while short sales made up 20% of the market.

The absorption rate (the number of pending listings versus the amount of available inventory) is 27.7% Valley wide, which is very promising when the historical percentage over the past two years is reviewed.

Current Conditions in the Phoenix Market:

There are 25,935 single family detached homes actively on the market in MLS. That is an increase of 370 listings for the week.
There are 32,034 active listings in MLS, which includes patio homes, town homes, condos and loft properties.

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The Phoenix Real Estate Weekly 5/7/2010

Barb Savoy — Fri, 07 May 2010 13:41:04 +0000

It appears as though we have another week of “the good, the bad, and the ?”

The good

The absorption rate Valley wide in all price ranges is 28.4%.
In the price ranges under $175,000 the absorption rate is 30-40%
Valley wide there is a 4.5 month supply of inventory (seller’s market)

The bad

The absorption rate drops into the teens at the $375,000 threshold
The absorption rate drops to single digits at the $800,000 threshold
In the luxury price ranges ($1,000,000 and over) there is a 17.2 month supply of inventory

The ?

Appreciation is down from 9.4% two weeks ago to 5.9% today. That may seem discouraging at first glance, but is much healthier than a steep incline that could be followed by a steep decline as we’ve seen historically.
Alt-A loans (borrowers who had good credit but chose stated income loans) that originated during the peak of the market just began re-setting in the fourth quarter of 2009. It is unknown how many of those borrowers 1). over stated their income at loan origination, 2). how many are still earning the same amount of income, and 3) how many who are able to afford the homes they purchased will strategically default.
Inventory is continuing to decrease, but appreciation is declining, which defies the law of supply and demand.

Current Conditions in the Phoenix Market:

There are 25,568 single family detached homes actively on the market in MLS. That is a decrease of 1405 listings for the week.
There are 32,645 active listings in MLS, which includes patio homes, town homes, condos and loft properties.

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director Business & Career Development
Keller Williams Arizona Realty
www.PacellaGroup.com
(480) 767-3009

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The Phoenix Real Estate Weekly 4/23/2010

Barb Savoy — Fri, 23 Apr 2010 14:40:27 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director of Business & Career Development ~ Keller Williams Arizona Realty ~ www.PacellaGroup.com

The Market Optimism May be Contagious!

As reported by Peter Corbett in the Arizona Republic on April 15th, according to a University of Arizona forecast, the Valley’s new-home market is on its way to recovery.

The UofA Economic & Business Research Center report predicts that new-home permits in metro phoenix will jump 54% over last year and that permits will more than double next year.

Also on the plus side is affordable housing. Data shows that six out of ten homes sold in the fourth quarter of 2009 were affordable for families earning the Valley’s median income.

Valley-wide, residential re-sale appreciation is hovering at 9.4%, up from -41.7% at this time last year.

Valley-wide active inventory:

17% are foreclosures

43% are short sales

40% are equity sellers

Valley-wide monthly sold inventory:

51% are foreclosures

17% are short sales

31% are equity sellers

Scottsdale active inventory:

7% are foreclosures

24% are short sales

69% are equity sellers

Scottsdale monthly sold inventory:

24% are foreclosures

16% are short sales

60% are equity sellers

Current Conditions in the Phoenix Market:

There are 26,973 single family detached homes actively on the market in MLS. That is a decrease of 374 listings for the week.
There are 33,940 active listings in MLS, which includes patio homes, town homes, condos and loft properties.

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The Phoenix Real Estate Weekly 4/16/2010

Barb Savoy — Sat, 17 Apr 2010 01:20:45 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director Business & Career Development ~ Keller Williams Arizona Realty
www.PacellaGroup.com

The Phoenix Metro Area market continues to show signs of strengthening and reason for optimism.

The average rate, Valley wide, at which the market is absorbing active inventory is 26.9%. That number is considerably higher in the price ranges under $200,000.

There is currently a 4.9 month supply of inventory and appreciation is at 9.6% this week.

Reviewing year over year data:

* Sales are up 30% from the same time period last year.

* The average price per square foot is up 10% over the same time period last year.

* Days on Market is down 20% from the same time period last year.

* Days of available inventory is down 45% from the same time period last year.

Are you observing a trend? The sales volume and price are going up as the days on market and inventory are going down.

Current Conditions in the Phoenix Market:

* There are 26,973 single family detached homes actively on the market in MLS. That is an increase of 115 listings for the week.

* There are 34,386 active listings in MLS, which includes patio homes, town homes, condos and loft properties (versus approximately 50,000 listings in the market two years ago).

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The Phoenix Real Estate Weekly 4/2/2010

Barb Savoy — Sat, 03 Apr 2010 00:08:50 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS ~ Director Business & Career Development for Keller Williams Arizona Realty ~ www.PacellaGroup.com.

Avoiding anything unforeseen, the current market conditions appear to be improving.

You may have noticed that I have been watching the appreciation forecast weekly. It’s hard to believe that last year at this time it was -43.5%. In recent weeks, we have observed week over week improvement, and appreciation is +10.5% this week.

Two years ago, the Valley wide absorption rate was 5%. There is still a direct relationship between areas of largest distress and absorption, however, all areas of the market are seeing improvement in absorption. The luxury markets are still proving to be the slowest to show improvement:
Phoenix Metro 26.3%
Luxury (over $1mil) 5.3%
Cave Creek 18.0%
Chandler 24.9%
Fountain Hills 16.7%
Gilbert 29.0%
Glendale 31.4%
Mesa 28.4%
Paradise Valley 8.9%
Peoria 25.7%
Scottsdale 15.8%
Tempe 19.5%
Across all markets, absorption was 30-40% in the price ranges under $200,000.

Current Conditions in the Phoenix Market:
* There are 26,858 single family detached homes actively on the market in MLS. That is a decrease of 365 listings for the week.

* There are 34,396 active listings in MLS, which includes patio homes, town homes, condos and loft properties (versus approximately 50,000 listings in the market two years ago).

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The Phoenix Real Estate Weekly 2/26/10

Barb Savoy — Fri, 26 Feb 2010 22:19:51 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS

Director Business & Career Development

Keller Williams Arizona Realty

There are good reasons to be optimistic about the Phoenix market. There are signs that the light at the end of the tunnel may not be a train.

It’s not a surprise that:
* The strongest month for monthly median appreciation occurred in October of 2005 with a market overall appreciation of 55%.

* The weakest month for appreciation occurred in May of 2009 at -47%.

What might be surprising is that:
* Monthly median appreciation is currently at -3% versus last year at this time, when appreciation was -39%.

Current Conditions in the Phoenix Market:
* There are 27,582 listings being actively marketed in MLS, which is relatively unchanged for the past two weeks.

* There are 35,224 listings being actively marketed, including condos, patio homes, town homes and lofts.

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The Phoenix Real Estate Weekly 2/5/2010

Barb Savoy — Fri, 05 Feb 2010 14:35:26 +0000

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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The Phoenix Real Estate Weekly 1/29/2010

Barb Savoy — Sat, 30 Jan 2010 01:50:58 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director of Business & Career Development
Keller Williams Arizona Realty

Here we go! The moment we’ve all been anticipating! Would we see the traditional rise in pending sales anticipated to begin the third week in January annually, or would the “shadow inventory” of foreclosures flood the market?

The results are in. According to the Cromford Report:

* Pending listings are up 5% over the past week.

* It is also anticipated that January will see the fewest notices of trustee sale in approximately 20 months.

During the same week in 2009, we had approximately 20 months of active inventory, versus approximately 7 months in 2010. Additionally, the average sale price per square foot (Valley wide and all dweling types), increased by $2.00 per square foot in the past month.

All of these are certainly positive indicators and reasons to be optimistic.

Current Conditions in the Phoenix Market:
* There are 27,448 single family detached listings currently active in MLS. That is an increase of 128 listings over last week.

* There are 35,015 total listings, including all dwelling types (including condos, patio homes, town homes and lofts).

To view homes for sale, or for additional information visit www.PacellaGroup.com or phone (602) 908-0373.

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