The WeBuyTucsonHomes Blog

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 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