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.

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 Tucson La Paloma Resort & Spa and Westin Hilton Head Island Resort & Spa in South Carolina, financed via a $209 million loan from JPMorgan & Chase, is near default according to Standard & Poor’s. The loans were based on rising revenue. The harsh economic times have reduced revenues and rising cancellations have pushed the two resorts on the brink of default.

La Paloma could be on the brink of default

BAD NEWS FIRST

30 Reasons for the Next Great Depression

Homebuilders Index is at an all time low.
Guess that is what happens when you overbuild, ask the telephone companies from the dot come bubble.

GOOD NEWS
HUD relaxes requirements for Hope for HomeOwners

Mortgage rates are going down

Freddie Mac and Fannie Mae suspend all foreclosures until after the holidays!

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

This past week saw 198 Notice of Sales for Pima County meaning a rough total of 35.8 million dollars entered into a final stage of preforeclosure. Once again the zip code of 85706 led the way with 22 notices followed by 85713 with 14 notices.

Here is the chart looking at the number of notices per zipcode.

Many mortgage companies have started programs to outline what type of risk a home mortgage contains dependent on the zip code.  This translates to home buyers having to pay an extra 5% or more on their down payment.  For some home buyers this will keep them on the sidelines as an extra 5% of a $200,000 home is $10,000.  With tightening lending standards this could mean buyers may need to come up with 25% or more!

These new standards can be attributed to the declining market conditions, the multiple month supply of homes on the market, and many home owners ready to walk away from their homes.  As banks try to avoid getting caught with a mortgage balance more than the value of the home, these lending practices become a self fulfilling prophecy.  Many want to be homebuyers do not have the additional 5% down payment so they will sit on the sidelines.  The homeowners trying to sell their homes have no buyers so they will be forced to lower their prices, thus bringing down the average home selling price and turning many homeowners upside down on their mortgages. 

In another note, the National Association of Realtors has changed their prediction of prices being flat in 2008, to a slight decline of 1.2%  This is still the most optimistic prediction of several investment firms.  Merrill Lynch has a 15% drop in home prices this coming year, while many others think 15% will be a minimum drop.  This could leave even more homeowners with mortgage balances exceeding their home values. 

It’s not a pretty market out there, but if you need to sell your home and if you believe you are upside down in the market, then we can help you.  WeBuyTucsonHomes.com is an investment company that specializes in helping homeowners that need to sell their home quickly.  We have multiple years experience in dealing with banks and homeowners who are in a situation that calls for them to sell quickly.

According to recent research posted in a New York Times article, if you are not yet behind on your payments but are about to be, it is now tougher to contact your mortgage company when trying to negotiate a short sale. 

… it is possible to get a feel for what is happening on the ground from a new survey of 2,400 real estate agents sponsored by Inside Mortgage Finance Publications. The survey taps into the outlook of people who see troubled borrowers firsthand, when they try to sell their homes before foreclosure occurs.

For example, agents participating in the survey confirmed what many borrowers say: that loan servicers are downright unresponsive. This is especially true when distressed owners try to sell their homes before being put through the trials of foreclosure. When they sell at a price that is lower than the outstanding mortgage debt, that is known as a short sale.

Asked how servicers could streamline such sales, one said: “Allow you to go directly to the loss mitigation department without having to speak or argue with eight people before they finally give in and transfer you.” Another said: “Respond to offers within five business days — they are killing the market by taking upwards of three months to respond to an offer.”

A third participant said: “Answer their phone, make it easier to talk with the appropriate people, instead of playing Mickey Mouse games. I have never understood why these companies who are owners of a defaulted loan do not make it easier to communicate with agents who are trying to sell these homes.”

A few months ago mortgage companies were holding press conferences to announce great new programs developed to work with homeowners who were at high risk for foreclosure.  They would talk about “streamlined” processes, willingness to help modify loans, even help to reduce payments all to keep the homeowner in their house.  But now research has come out that many banks have not taken this course, and it appears they now have an adversarial relationship with the homeowner who is trying to do the right thing and let the banks now they are not going to be able to make payments on their home.

Where does this leave the homeowner who has realized they are no longer going to be able to afford payments on their home?  Unfortunately they are left in the same situation as before and will have to work through the process of contacting the bank, getting in contact with the loss mitigation department, then trying to find a buyer for their property. 

The article shows, that even large banks still have human components that make the decisions, and it is always best to try and take a “friendly” approach opposed to an adversarial “me vs. the bank.”  I have found just having common courtesy and being patient is much better than taking a hard stance and demanding a bank work something out. 

If you are a homeowner and find that you are about become behind in your payments, or already behind please contact WeBuyTucsonHomes.com to receive a free consultation and free offer on your home.  There is never a charge and everything is strictly confidential.

~Caleb

According to an article from cnn.com:”

“The group’s forecast released Tuesday also no longer sees even a modest rebound in existing home prices this year, as it had previously forecast, and pushed back the estimate of a full-year uptick in prices to 2009.

 The National Association of Realtors’ Pending Home Sales Index, which measures the level of sales agreements, fell 2.6 percent to 87.6 in November, turning lower after two months of modest improvement from a record low hit in August. Economists surveyed by Briefing.com had forecast only a 0.8 percent decline.”

The article quoted is optimistic about home prices stabilizing in the coming year, and beginning in 2009 starting to rebound higher.  I believe the recovery will take longer than the National Association of Realtors is predicting.

One reason is a simple measure of how many homes are being taken back by the banks.  If you look at a blog dedicated to tracking how many homes CountryWide Financial has taken back, you will see that they are having trouble selling homes to get them off the books.  In simple economics means supply is greater than demand at the current prices.  Once I start to see the chart leveling off for more than a couple of months I would look to call a bottom, but for now a lot of homes owned by mortgage companies are overpriced.

How can you use the above information?

• If you are facing foreclosure act quick to sell your home.  The further behind on payments you become, the higher your starting asking price will have to be to repay your loan.

• If you have equity in your home and need to sell quickly, you might start with a lower asking price compared to all the other homes in the neighborhood.  You can always contact us at  webuytucsonhomes.com for an offer to purchase your home.
• If you have no equity and need to sell your home, ask your lending company if they will work with you to obtain a short sale.  Webuytucsonhomes.com can also help you negotiate with your bank if you want us to buy your home!
• If you aren’t planning on moving in the next 4 years, stay in your home!  There are many extra costs associated with buying a new home and they can quickly add up.  There is also a chance that interest rates are going to be going lower, so it maybe better to try and refinance at a lower rate in the future!

I hope these help and if you ever have any questions about real estate or selling your home, please contact us at WeBuyTucsonHomes.com!

~Caleb