The WeBuyTucsonHomes Blog

The same scam artist story is repeating itself over and over again.  If you are in foreclosure and need help there are plenty of places to go.  WeBuyTucsonHomes will be glad to help answer any question you may have regarding the process, how to delay or even stop the foreclosure, or assist you in finding a reputable place for a loan modification.  One thing any reputable company will never do is charge an upfront fee.  Your scam alarm should be going off if someone is offering to stop or delay your foreclosure but they want hefty upfront fees.  Many times a company will receive money from the bank for helping to modify the loan, also there are plenty of government sponsored entities that will assist you with no fees.  It sickens me to see the scams so prevalent in the area.

Arizona republic reports

Foreclosure-rescue scams have shot up 30 percent in Arizona during the past few months.

Arizona Attorney General Terry Goddard delivered that startling statistic last week at the Arizona Foreclosure Prevention Task Force meeting. It was the right crowd to engage about the growing problem.

“Firms are contacting homeowners on the verge of foreclosure, offering help and instead taking the money the homeowner has,” Goddard said. “We have a real obligation to find these people and prosecute them.”

The latest foreclosure-rescue scam involves loan modifications, the program that’s the backbone of the federal housing plan announced in February. In a loan modification, a lender and homeowner work out a deal to cut interest rates and even principal on mortgages of homes in danger of foreclosure.

Free counselors, certified by the U.S. Department of Housing and Urban Development, are available to help homeowners work with lenders. Arizona homeowners can call the state’s foreclosure hotline at 877-448-1211 to find a counselor. There also are reputable private firms, run by attorneys, mortgage brokers and real-estate agents, offering loan-modification help.

But a growing number of scam artists that have joined the scene, promising help, taking hefty upfront fees and then leaving homeowners on their own.

Data released last week shows mortgage companies have made more than 55,000 offers to modify loans since the program was launched in March. There are 14 companies, which service about 75 percent of all U.S. mortgages, signed up to do loan modifications.

The federal program was expanded to help people who can’t afford their mortgages and don’t qualify for a loan modification. They may be able to still avoid foreclosure by using new streamlined processes for short sales or deeds in lieu. Like with modifications, lenders and borrowers can get $1,000 or more to work out deals to avoid foreclosure.

The different federal housing programs continue to confuse many homeowners and servicers at lenders agreeing to participate, slowing the process.

“What is needed is a coordination of policies between all lenders on both the modification and refinancing programs,” said Jay Luber, Galaxy Lending president.

This past week saw a low in the Notice of Default(NOD) filing in Pima County.  Only 116 notices were filed, however 85706 received 19 of those notices.  The Zillow estimate of those homes comes in around $19.9 million, while the 1st lien position comes over $20 million dollars.  Add in the usual 15% second and the total encumbrance adds up to $23 million.  Meaning this past weeks homes are very underwater and unlikely to sell unless a large short sale is negotiated with the lenders.

Here is the chart.

The week before Christmas saw 190 Notice of Defaults(NOD) filed in Pima County.  NOD’s are the first stage of foreclosure, and are usually filed 90 days before the house will go to auction at the courthouse steps.

The 190 filings this week total 1st lien position was ~$38.3 million and Zillow Estimates of the homes were $39.86.  Again usually these homes include a second or even a 3rd mortgage so we add an additional 15% to get a total encumbrance of $44.04 million.  This is substantially higher than the Zillow Estimates and means each home is underwater by 10%.

A surprise in the filings was the zipcode 85706 with 28 filings, outpacing the closest competitor zipcode 85713 with 13 filings.  The subdivisions with the most filings: Continental Reserve, Tres Pueblos, and Terra Del Sol.

The holiday season is finally past and the retail numbers coming in look grim.  Already companies are planning to layoff 1 million workers in 2009.  If the economic numbers get worse the layoffs could rise even higher, leading to a higher foreclosure rate.  I have already seen investment banks predicting 8 million foreclosures through 2012.  Rest assured Pima County will have its share of that 8 million.

I suspect the higher number of defaults came from the previous weeks low filing number.  For the week of Dec 8-13 2008, 216 N.O.D were filed in Pima County.  The total sum of first mortgage liens came in around 39.3 million while the Zillow Estimates came in around 42.5 million.  If you add most of the mortgages contained 2nd or 3rd mortgages at 15% of the first the total liens came in around $45.2 million dollars.  This means most houses are ~13% underwater and have very little chance of selling on the market.

Continuing a trend 85746 and 85706 both lead the way with 22 filings for the week which is up from the previous weeks.  85710 followed with 12 notices for the week.  Here is the graphical break down, and the subdivision with the most filings was: Gladden Farms.

Pima County NOD filings

The past week saw little change in the number of foreclosures for the first week of December.  The past month large banks, Freddie and Fannie Mae released press statements announcing a hold on foreclosures until the end of January and sometimes later.  Here in Pima County the number of defaults filed hasn’t changed substantially, but it could be they are postponing all foreclosures that are already slated between now and the end of January.

To the chart!

195 notice of defaults were filed Dec. 1-7th.  The leading zip code was 85742 which happens to be because a luxury builder has struggled to make payments, and sell property.  If you are looking for some great luxury deals this might be for you.  If you would like to know the address or the builder just shoot me an email at caleb@webuytucsonhomes.com.  The properties in 85742 range low end $121,000 to $2,000,000.

The next zip code was 85746, and 85706 with 16 and 14 defaults respectively.  85746 has remained high on the notice of default list and I expect this will continue with the high number of homes for sale along with the bank sales in that zip code.  I have talked with many sellers in that area and it is still very tough to negotiate with the banks to have them accept a substantial short sale.  I remain pessimistic on the neighborhoods in the new communities and think it will take many years for them to recover.

If you wish to discuss anything from the graphs please post a comment or shoot me an email.

18 NODs in Pima County

The week of Nov 24-28 saw a low number of N.O.D.s filed in Pima county, but because a large “retirement home” missed a few payments, the total dollar amount of first mortgages ran over $74 million dollars.  The retirement home contributed over $45 million dollars in mortgages to the total, because of that the $45 million will be taken out in the calculations below.

The number of filings were down presumably to the short holiday week, but a surprising number of “luxury ($500,000 and up)” homes fell into default.  Usually one or two homes will fall into default every couple of weeks; the past week saw 8 home.  Following what many financial analysts have been lamenting, a couple of commercial buildings were found to be on the list.  The amounts were relatively small at only a few million dollars, but if the trend continues we could see discounts coming in commercial buildings and more cheap office space for rent.

A total of $29.1 million dollars were in default, not including the $45 million from the retirement home, with a Zillow value of $26 million dollars.  This was the first time in running this list that the values were more than the first mortgage.  This could have devastating effects on the banks holding the notes.  Usually in a short sale the banks will discount or remove the second mortgage to help facilitate the home sale.  However, if the home is now worth less than the first mortgage, banks may be even less inclined to negotiate and favor to take the home back(foreclose) rather than take a chance on a definitive short sale loss.  It will be interesting to see if this trend continues.

Further, this week I noticed more properties held 2nd mortgages in excess of 15% of the first mortgage.  The 15% standard 2nd mortgage will not be increased, but is of interest as the amount of 2nd mortgages could be much higher.  Also 85746 outpaced 85706 14 to 13 in NOD filings marking the first tim85706 has not lead the way in homes in default.

So here is the chart.(Upgraded to Office 2007 so the charts are “prettier”  :))

116 Notice of Defaults for Pima county

Sorry for being a little late, the holiday season seems to always come with a bang.

Pima county recieved 202 notices of default during the week of Nov 17-21.  This number has been steady with a variance of 10% give.  This number hasn’t been changing much even with all the press releases of banks suspending foreclosures, and many businesses popping up to help with the loan modifications.  It makes one wonder how successful the banks are in negotiating a loan restructuring.

To the numbers!  201 NOD’s were filed with a first lien position of roughly $39.5 million dollars in loans going bad.  Add a 15% average 2nd position($5.925 million) and the total balloons to $45.5 million dollars in bad loans.  According to Zillow,  the property totals are worth ~$41.3 million dollars.  A difference, if the houses were to sellat Zillow estimates, of $4.2 million dollars.  Not a large sum but if that figure added up over a year it would look at $200 million dollar shortfall for the banks.

201 NOD filed in Pima County Nov 17-21

Nov 10-14 Pima County recorded 127 Notice of Sale documents against homeowners this past week. First mortgage loans totaled roughly $23.5 million vs $25.5 million in value(Zillow Estimates). Applying the same 20% average second mortgage against every home gives a total of $27.7 million owed vs $25.5 million in value. This means the average foreclosure home is 8% “underwater” this past week, better than last weeks average of 20% underwater.

Once again 85706 led the rankings with 12 filings, 85746 was second with 11, and 85629 was third with 9.

The Arizona Daily Star ran an article reporting the increased foreclosure sales figures for Pinal county.  According to the article 45% of the existing home sales in Pinal county were foreclosure driven.   That means of the 3,355 home sale transactions 1,515 were from foreclosure.  I can’t find any mention of Pima county but will be on the lookout.

This past week Pima County listed 185 Notice of Sales filed for the week of November 2-7. The first mortgage on the properties totaled roughly 34.4 million vs property values according to Zillow of 34.7 million.  Now remember this is only the first mortgage position and all most all of the properties list 2nd and sometimes 3rd positions. The second position can vary anywhere from 5% all the way up to 40%. Take a low end average 20% and the liens against the properties increase to over 41.2 million. This puts almost all the properties 19% “underwater.” Now factor in that Zillow maybe overestimating housing prices and some home owners could be even further underwater!

Looking at the chart we see 85706 again led the way with 24 notices filed. 85746 was second with 19 and 85711 was third with 14. Some interesting things to note were a few large real estate investing companies, both national and local are seeing notices filed against properties they own. Why do I mention this? They were speculators in some instances, as the filings were on very new and high priced homes, and also to show that the financing crunch paired with the downturn in housing is hitting everyone hard.

Here is the chart with 185 Notice of Sales for November 2-7, 2008