The WeBuyTucsonHomes Blog

CNNMoney is reporting the S&P Case-Shiller Home Price index dropped a record 19.1% during the first quarter compared to the first quarter of 2008. Year over Year the index dropped 18.7%. Tucson isn’t included in the index buy Phoenix is included. From 2006 peak prices to this past quarter, Phoenix home prices have lost almost 50% of their value.

Phoenix is seeing a surge of investors buying foreclosures. Some are even trying to keep the people foreclosed upon in the house as renters at a reduced rate, but a recent study stated less than one quarter of the foreclosed upon people stayed living in the homes.

Having talked to a few REO agents, foreclosures and “decent” deals are flying off the MLS quickly. They mention how all of a sudden the investors are purchasing multiple homes, and good deals are receiving multiple offers.

Along those lines the Fannie/Freddie foreclosure moratorium has just been lifted and could increase the buying opportunities over the summer, when the houses start to hit the market. I haven’t seen a large increase in the notice of defaults, but the banks might of just postponed all the sale dates.

From the azstarnet.com

KB Home has torn down its three model homes at its abandoned Saguaro Springs project in Marana. Liability concerns led to the demolition last week, a company spokesman said. Back in 2005, plans for Saguaro Springs called for 2,400 homes near Rattlesnake Pass just west of the Tucson Mountains.

But although roads were paved and some infrastructure was put in, the project never got off the ground and the model homes sat vacant and gutted for years. KB Home had partnered with California-based Empire Land LLC until Empire filed for bankruptcy last year. The site is now up for auction.

There are multiple videos on youtube.com highlighting multiple model homes being torn down. This is the first I have seen from Tucson or Phoenix of homes being demolished. If there are others please comment on it.

Very interesting read.  I wonder if anyone else has a story similar to this, or if his mortgage broker is still in business.  8 months of no payments and he is still living in the house, I wonder how long it will last now that he wrote the story.

New York Reporter in Foreclosure.

Registration is free, so be sure to read the whole article.

San Diego home sellers have trouble recognizing their homes are now worth 20% less than before.

Home prices have dropped so much, no one really knows what price homes will sell. A lack of credit worthy buyers and lack of lending in the nation, means a longer time on market. The longer the house is on the market, the more likely the Realtor will push for a price reduction. Most Realtors rely heavily upon this proven selling convention of lowering prices to sell homes quickly. The tactic works because everyone loves a bargain, but it comes at the sellers expense. There are ways to sell a home without lowering the price, but it means having a Realtor that is willing to work for a higher price. In this market that takes a lot of work to compete with bank foreclosures.

Great Information on how to work with your credit score.

Interesting on how many factors go into your credit score.

Changes coming to Good Faith Estimates

This form looks much better and will help many new home buyers.

1 in 3 homes sold for a loss last year.

Look at the chart! Countrywide’s REO inventory is still growing.

Arizona has some 1770 homes owned by Countrywide alone. Tucson has around 80 homes owned by Countrywide.

It looks like home prices have a long way to fall yet.

Have a great week!

Caleb

What is a Short Sale?

When I speak with homeowners in financial distress I am often asked “what is a short sale, and do I qualify for one?”

The answer is “it depends on your situation.” Which is not an answer that most sellers about to lose their house to foreclosure want to hear.

A short sale is defined by Wikipedia as:

“In real estate, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.”

A short sale is almost always used when a homeowner is in foreclosure, the home needs repairs, and the homeowner has financial circumstances affecting their ability to pay their monthly bills. A short sale can be attempted any time a homeowner is trying to sell their home, however the bank has little motivation to accept a short pay offer if the homeowner is current on their payments.

If you are approached with a short sale on your home you should be prepared to bare your financial soul. Meaning the bank will want to see about every financial record you can provide. Ok it’s not that bad, but that was one client’s feelings about the required documents the bank requests.

In the beginning of the process the bank will ask that you fill out a short sale package, and return the questionnaire along with:

1. a hardship letter
2. 2 months pay stubs
3. 2 months bank statements
4. Signed Sales Contract
5. Estimated HUD1
6. 2 years tax return documents
7. a short letter discussing why the short sale is a good option for both parties.

Deciding to sell your house via a short sale requires a lot of time and patience. Just filling out the forms can take a couple of hours and then it can be many months before the bank will decide to approve/disapprove the sale. If you ever have any questions you should be able to contact the buyer of the property and speak with them about the status of the sale. Just remember they are held in the dark for most of the process the same as you are.

Here are some questions from the package to give you an insight on what to expect. The package they send can be over 10 pages long!

Please describe the events and/or circumstances which have caused you to miss your mortgage payments.

When did this event and/or circumstances begin? When will it end?

What actions have you taken thus far to resolve your financial situation?

Describe the nature and amount of any increased expenses or income lost during this time.

We will explore more on short sales in the coming weeks.

Caleb

According to a recent Forbes article, many large investment firms are pooling money together to buy mortgages where the payments are late or in a state of foreclosure.

How can this information help you?  The goal of the investment firms is to buy the mortgages at such a discount that it then becomes beneficial for them to work with the homeowner to stay in the house.  Studies have shown that providing a working relationship with the homeowner and helping them to stay in the home is the most beneficial result to both parties.

If your mortgage company has recently sold your loan, and you are currently behind the first step to resolving your issue should start with you contacting your mortgage company.If however your lender has not recently switch you, and you are still behind on mortgage payments your first step should still be to contact your mortgage company to discuss different options they may have for you.

Should you decide selling your home if the best option for you, or you have any questions regarding foreclosure and how to stop it, please contact WeBuyTucsonHomes.com  for free information.

Recently I was called to speak with some people who had been served with a Notice of Sale. While driving out to the community, I started to notice more and more signals homes had long been vacated. The subdivisions were newer, about 4-5 different builders, and most of the homes being built in the past 3 years. How could these new homes become vacant so quickly? We will find that out latter.

After the meeting I decided to drive the neighborhood to get a feel for the type of homeowner that would like to live in this particular subdivision. The neighborhood was newer, housing prices had been in the 250,000 range, but prices now were sharply dropping.

Touring the neighborhood for a few minutes I ran into blocks and blocks of empty lots. There were about 3 homes built for every 20 empty lots. The sales office for the builder wasn’t even open on a weekend, looking up the sales on the local MLS site revealed 22 homes for sale in a 1/4 mile radius. Not only were these homes for sale, but 1/4 of them mentioned a short sale in their listings.

So when the struggling homeowners decided to sell not only were they limited by their own mortgage company, but they were competing against a builder who was releasing homes at prices lower than the previous year. This could be the reason why so many homes were vacant. Coupled with ARM’s resetting and the builder reducing prices, the only choice for the homeowners was foreclosure.

This would set the scene for crimes described in this CNN article. Crime scene: Foreclosure I honestly hope Tuscon does not see a crime spree from the recent empty foreclosures. A good way to avoid having empty homes in your neighborhood is to contact We Buy Tucson Homes

Do you know a family member, a friend or co-worker, or someone in your neighborhood who is facing foreclosure? If so please have them contact We Buy Tucson Homes! We will do our best to keep them in their home, and the house from becoming vacant for a long period of time.

President Bush recently announced a plan to help homeowners who are facing ARM resets on their home loans. The program is called “FHASecure” and to qualify the current borrower must have:

1. A history of on-time mortgage payments before the borrower’s teaser rates expired and loans reset
2. Interest rates must have or will reset between June 2005 and December 2008
3. Three percent cash or equity in the home
4. A sustained history of employment
5. Sufficient income to make the mortgage payment

Borrowers must also be occupants of the house they are trying to refinance and have a mortgage below the insured loan limit for your area ($263,150 in Arizona).If you have any questions about the FHASecure plan I would encourage you to contact your local HUD office via their webpage.If after discussing your options with HUD you decide to sell your home please contact WeBuyTucsonHomes to discuss options is selling your home quickly!

FROM Yahoo News:

The article is directed to new home buyers who are looking for mortgages:…

The Fed, which has regulatory powers over the nation’s banking system, is proposing:

 “_restricting lenders from penalizing certain subprime borrowers — those with tarnished credit or low incomes — who pay off their loans early. The restriction would apply to loans that meet certain conditions, including that the penalty expire at least 60 days before any possible payment increase.

_forcing lenders to make sure that subprime borrowers set aside money to pay for taxes and insurance. _barring lenders from making loans when they don’t have proof of a borrower’s income.
_prohibiting lenders from engaging in a pattern or practice of lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value.”

I had to reload the blog as I ran into some major problems with the links.