Buying Arizona Real Estate » Lender Owned

FHA waives the 90 day flip rule

Tony Pomykala — Mon, 18 Jan 2010 17:09:56 +0000

I received a nice email from Michael Neill of American Alliance Mortgage Company with the following fantastic news:

BREAKING NEWS!!!!!FHA WAIVES 90 DAY FLIP RULE

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS

Measure to help bring stability to home values and accelerate sale of vacant properties

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes…

…The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

· All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

· In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

· The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website at: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Mike Neill
480-505-2202 ext 208
mike@aamcbank.com

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Buying Foreclosures from Banks

Tony Pomykala — Thu, 06 Aug 2009 19:02:06 +0000

by Tony Pomykala, REALTOR, ePro
Sunrise Investments, www.HomeListingsArizona.com

Many people still don’t get it, so I’m going to try to explain it a little better here.

The housing market evolves. When the market evolves, the buyers and sellers must adapt or be rendered ineffective. That’s natural. That’s survival.

If you are trying to sell a house and no one is buying it, you must upkeep and maintain that house. You need to clean it, to watch over it, to repair it if something happens to it. You need to maintain some utilities to it. All that is expensive. Is there a better way?

When the housing bubble crashed and banks found themselves with a lot of inventory to sell, they dutifully handed them over to their real estate agents who placed the houses on the market at perceived market value. Many homes would eventually sell, but like the rest of the glut of inventory out there, most took time to sell unless something about that property really stood out over its peers (Even today, many people don’t realize that in a buyer’s market you can’t add price to extra valued items in the home, but it’s the extra valued items that does get you sold when the price is comparable to the other similar, but less featured, homes). Many foreclosure homes are rather plain, if not distressed properties. The only thing in their bag of tools that could set them apart from the pack turned out to be pricing.

Today, many Banks have figured out that if they want to move their inventory faster (so that they don’t have to waste more money on foreclosures than they already have), they will start out by listing their homes for sale for a lot under market value.

Why? Well, for months Buyers have been low-balling offers in to them anyway. So the banks have evolved. They learned that if you throw bloodied meat on the ground you attract more vultures. When vultures start fighting over the meat, they’re willing to do more to win that prize. The low ball offers rise back up in the bidding war and before you know it, banks are getting respectable purchase offers for the homes anyway. This all happens now within the first week on the market (usually the first weekend), the house gets Sold, and the bank avoids having to pay prolonged retention costs. From a business standpoint, this is truly ingenious and it usually works!

Although the winning offer is often less than actual market value still, it’s usually only slightly less. So when you figure in retention costs saved, the bank has made out quite well. The only downside is that a home sold for less than market value drives down comparable property values, so the pricing slide continues.

But as far as the Bank (seller) and Buyer of that home are considered, they both win.

And that is why it has evolved this way.

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REO vs. Non-REO Sales by City (Foreclosures vs Other Sales)

Tony Pomykala — Thu, 23 Jul 2009 06:36:08 +0000

Posted by Tony Pomykala
Sunrise Investments
www.HomeListingsArizona.com
Written permission granted from Ultimate Information Systems, Inc., to use this Copyright© 2009 material – Thanks to Bob Yarrow Sourced: AZ Regional Multiple Listing Service website. Information included here is deemed reliable, but not guaranteed.

ARMLS Reported Sales – Segments of Maricopa County – Single Family Detached – JUNE 2009

REO vs. Non-REO Sales by City
City	Vly Seg	REO	Not REO	Total Sales	Percentage REO Sales	.	City	Vly Seg	REO	Not REO	Total Sales	Percentage REO Sales
Ahwatukee	SE	2	3	5	40%		New River	NE	10	8	18	56%
Anthem	NE	21	37	58	36%		Paradise Valley	NE	3	21	24	13%
Avondale	W	209	62	271	77%		Peoria	W	188	130	318	59%
Buckeye	W	215	77	292	74%		Phoenix	PHX	1490	676	2166	69%
Carefree	NE	2	1	3	67%		Queen Creek	SE	43	44	87	49%
Cave Creek	NE	18	34	52	35%		Rio Verde	NE	3	1	4	75%
Chandler	SE	161	242	403	40%		Scottsdale	NE	116	312	428	27%
Desert Hills	NE	2	2	4	50%		Sun City	Adult	24	53	77	31%
El Mirage	W	104	31	135	77%		Sun City West	Adult	2	67	69	3%
Fountain Hills	NE	11	43	54	20%		Sun Lakes	Adult	0	29	29	0%
Gilbert	SE	187	255	442	42%		Surprise	W	211	186	397	53%
Glendale	W	334	145	479	70%		Tempe	SE	33	73	106	31%
Goodyear	W	137	88	225	61%		Tolleson	W	133	23	156	85%
Higley	SE	2	0	2	100%		Tonopah	W	5	1	6	83%
Laveen	PHX	115	50	165	70%		Waddell	W	13	10	23	57%
Litchfield Park	W	59	28	87	68%		Wittmann	W	11	5	16	69%
Mesa	SE	367	301	668	55%		Youngtown	W	18	6	24	75%

Although the West Valley is where the furious and fast action is taking place, Mesa is seeing some serious action of it’s own (55%). But across the Loop 101 into Tempe, not a whole lot of foreclosures making impact yet (only 31%).

If you want to buy a foreclosure in the far west valley, you better be willing to place your Purchase Offer the same day it goes on the market or you can kiss it goodbye to someone else!!

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