The WeBuyTucsonHomes Blog

Bloomberg reports Mortgage Delinquencies, Foreclosures, Rates Increase:

“If people don’t have a paycheck they can’t support a mortgage,” Jay Brinkmann, the MBA’s chief economist, said in an interview. “The longer the recession lasts the more people run through their savings reserves, leading to higher delinquencies and higher foreclosures.” …
One in every eight Americans is now late on a payment or already in foreclosure as mounting job losses cause more homeowners to fall behind on loans, the MBA said.

The recession is taking its toll on housing, and the longer we are in a recession, the further housing prices are going to fall.

Measuring both old and new defaults, 11 percent of all mortgages in Florida were in foreclosure at the end of the first quarter, the highest in the U.S. In Nevada, it was 7.8 percent, in Arizona, it was 5.6 percent, and in California, it was 5.2 percent.

The question is how many of the 5.6% are going back to the banks? More foreclosures will lead to lower housing prices. The historical house price average is around 3.1 times the average annual household income. Look for a bottoming when this happens. Tucson family income for 2008 was roughly $44,000, household income was roughly $36,000. The Tucson Association of Realtors reported in April the median average home sold for $164,000 still above the historical average when using either the family or household income. I look for prices to continue to drop this coming year. The month of May will probably show an increase in sales and home price but I would look for the summer to continue to decline.

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 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!

I thought it would be interesting to post the weekly statistics from the notice of sale list. This is a list that I comprise every week, via the Pima County Recorders Page. The data is collected by counting the “Notice of Sales” and associating the address with the correct zipcode. (Note that there is more than one way to file for a foreclosure in Pima County, but Notice of Sales are used for Deeds of Trust, which is the most common lien banks use.) Thus this is not a definitive number, but should be a reasonably accurate number based on my data gathering techniques. More data will be added in the coming weeks, and a chart of all 2007 notice of sales is in the works.

The past week saw 158 “Notice of Sales” filed, valued at roughly $30 million dollars in property. (Note that I only calculate the value based on the first mortgage. So if a home is encumbured by more than one lien only the first lien is used. Thus this number could be undervalued by up to 30% or more. A high degree of error, but at this time the data gathering methods do not allow for more accuracy. This will be something I will continue to work on improving.) Continuing trends include: over 95% of the deeds of trust entering foreclosure where originated in 2005-2007, the highest concentration of filings occur for the 85706 zipcode, and areas of new home developements show increasing numbers of foreclosure starts.