Mortgage Settlement Funds Must Be Used To Help Homeowners

Wake up Arizona: Your elected officials are working against you again!

 

This time Governor Jan Brewer is now considering using the $50 million award that Arizona received through the robo signing mortgage settlement from the country’s top five mortgage loan servicers, to balance the state’s budget.

 

The monies were part of the settlement reached by 49 states and the country’s five largest mortgage loan servicers who engaged in fraudulent foreclosure practices. The judgment stipulates the money should be used to avoid further foreclosures in the state.  But Governor Brewer thinks otherwise and plans to use the money for new services.

 

This defies common sense, particularly when Phoenix had the nation’s ninth highest metro foreclosure rate for the first quarter of 2012.  Forty-eight percent of the state’s homeowners are still underwater on their mortgage! While prices in Maricopa County have shown an increase over the last few months, home values are still a whopping 47 percent lower since the peak of the boom.

 

We’re far from being out of the woods in this situation. Until we stop the foreclosure cycle, these losses will continue to drain the life out of our state economy, diminish the quality of life in local neighborhoods and contribute to the crime rate.

 

In the Latino community, where foreclosure losses are the highest, the lack of support for foreclosure prevention services is another kick in the teeth.  In the post-SB1070 climate of hate and prejudice championed by Governor Brewer and other elected officials, this move simply alienates Latinos more.

 

Using the money as it was intended – to prevent more foreclosures – benefits all Arizonans.  By conservative estimates, these funds could provide counseling to 75,000 homeowners and legal aid for up to 10,000 people. 

 

This aid is vital to the continued recovery of local neighborhoods and Arizona’s economy.  Most distressed homeowners don’t have the experience or the means to get help, particularly low- to moderate-income homeowners. Turning our backs on this issue will only keep homeowners in a vulnerable position. Helping homeowners deal with default, get back on their feet and reestablish credit is fundamental to turning things around in Arizona.  

 

But the more obvious question here is: If our standing as the number two foreclosure state in the nation isn’t reason enough for Governor Brewer to help constituent homeowners, then what is?

 

 

Gail Buck on The American Dream Run and Shoes

he National Association of Hispanic Real Estate Professionals Arizona Chapter (NAHREP AZ) completed its first annual Run last week. The “American Dream Run” is a 4 mile run that we created to bring awareness to the American Dream. For me that means Diversity and Housing. We- yes, I ran too- also ran to provide funds for community outreach. It is interesting and frightening when you really start noticing the potential long term effects of the current housing market. The spillover affects that, in my opinion, we don’t hear enough about. One major example is our school systems. Just stop and think about the lost tax dollars that are necessary to fund the schools and provide education for our kids. Think about the neighborhoods that have experienced a high level of foreclosures and what that means to the area school. Vacant, abandoned houses provide zero tax dollars which in turn means cut programs, lower salaries for teachers or even fewer teachers, which in turn increases the level of drop outs and fewer kids going to college.  Now think about the long term effect of that, to our country. That scares me. It is beyond losing the equity in our homes and ruining our credit scores.

So in building our chapter and seeing what we can do with money that we are able to raise for the community outreach part of our chapter, we decided to invest in our kids. We have started a scholarship fund and are building relationships with local high schools in areas hit hardest by the current housing market. With the profit from the Run, we have purchased grass seed and one of our sponsors and members, Rick Fisher with APRSI (a man with a HUGE heart) has volunteered his company to prepare the grounds and plant the seed so that the school can have a beautiful baseball field and a team when the season rolls around. In addition, at this same school, we learned that many of the track students run with used shoes and so we are buying the entire team new fitted shoes for the new season.  We learned that all the kids that participate in sports at this school carry a high GPA, do community outreach and many have been offered sports scholarships to college.  Interesting, I found myself discovering that I had preconceived ideas of what the majority of the kids were like in schools in areas where the income is low and the foreclosure rate high. I was so wrong. These kids work hard at school, excel academically, participate in sports when there is help to do so and work or do community outreach. I personally am more committed than ever to work with these kids as my way to make a difference. I think most of us want to make a difference, right? Sometimes we just don’t really know how. When you think about how simple that can really be. Paying the sports insurance required for one student to participate in cross country for the season is $25.00….. Sometimes the lack of that $25 prevents that student from being able to participate.  What a difference that alone would make in one person’s life and who knows….you might have helped them go to college on a scholarship, or find leadership in a different way and be able to know that someone cared enough to help them reach their dream and may they will do the same.

http://activerain.com/blogsview/2596142/gail-buck-on-the-american-dream-run

The American Dream Run

The American Dream Run

NAHREP AZ is hosting its first annual American Dream Run. It’s a 4 mile run in Peoria. I have been asked a number of times why we are organizing the run and where do the proceeds go. We, NAHREP AZ, are an organization that believes in the American Dream of homeownership. We know that statistics show that kids who grow up in homes owned by their family tend to do better in school and stay out of trouble……..obviously not all! But the statistics weigh in their favor. I suspect that comes from the stability that owning your home brings.

We believe in diversity and that all people should be afforded the same rights and priviledges. The objective of the run is to celebrate and bring awareness. A reminder of a couple of things this great country of ours is all about. Proceeds from the run are used to educate the Real Estate community and the consumer on ways to obtain that dream. For example, there are a number of rehab loans available right now. You can buy a home and include money in the loan to rehad the place just like you want it. You probably don’t need to buy it today and save to make changes later on. Make them now. Make it affordable and part of your loan. We believe in sustainable homeownership. Purchasing a home should give you a piece of mind not add more stress to your life. So we educate on credit repair, transitioning from default to homeownership, rehab loans, new products, avoiding fraud – whatever we can do to make our industry better.

So come and celebrate with us and get a good run in! We are only a couple months away from Marathon season!

NAHREP-AZ American Dream Run – 4 Miles
Sunday, October 30th, 2011 – 6:30am Registration, 7:30am Start
Rio Vista Community Park
8866 W. Thunderbird Rd.
Peoria, Arizona 85345

Numerous awards and raffle prizes will be presented!
For registration information, visit www.facebook.com/AmericanDreamRun

 

 

 

Average Delinquency and Foreclosure Timeline 599 days!

 Average Delinquency and Foreclosure Timeline 599 days!

This is the missing piece I was referring to in an earlier blog about “shadow inventory”. According to the data that is available to us, In Arizona there is only about 3 to 4 months of “shadow inventory”. As a reminder, those are the properties where the owner has received a Notice of Trustee Sale and the foreclosure process has started. Between the time they receive the notice and the property hits the market – that is the shadow. What has not been readily available is the number of mortgages that are delinquent but have not been served the Notice.

DS news published a great article yesterday titled “LPS Puts Average Delinquency =Foreclosure Timeline at 599 Days“. Their studies show that judicial states would require 111 months to work through these delinquencies. Arizona is a NON-Judicial state. According to LPS, we would require aprox 32 months to work through our delinquencies. While first time foreclosures have slowed down considerably-dropped by 38 percent, repeat foreclosures are on an upswing. It’s going to be an interesting 2012!

Mortgage Fraud Increase with Short Sales

Mortgage Fraud Increase with Short Sales

 

Selling your home or investment property today isn’t what it was just a few short years ago.  Currently in Arizona 57% of property sold are an REO (Real estate Owned or more commonly known as a foreclosure) or a Short Sale. A short sale is when you sell a property for less than what you owe. This requires negotiations with your bank, a meeting with your tax preparer and maybe even an attorney. While Short Sales are becoming more and more common there are some warning signs that you should watch out for.  Did you know that with the Mortgage Fraud increase in Short Sales and an increase in legal issues?

The 5 biggest issues to be aware of are as follows: 

1.  Beware of “Flopping”. Flopping is when you and your Real estate agent have a buyer who is purchasing the property for a price lower than it is worth while at the same time the agent and buyer have a second buyer lined up to purchase it at the same time or immediately after for a higher price.

2.  Beware of Reverse staging. This is when the agent prepares a BPO (Broker Price Opinion) that is low by inflating the repair estimates or making the property look more distressed than it really is.

3. Beware of creative proceeds on the HUD. Skimming the net proceeds is illegal.

4. Beware of maneuvering family and loved ones in an effort to keep the property. Parties are now obligated to sign what is called an “arms length transaction”. And attest that the sale is truly arms length.

5. Beware the untrained Real Estate Professional. Short Sales require special training. The most significant legal issue facing sellers and real estate professionals  today are short sale disputes. The major case is insufficient training.

Radar Logic to Propose Plan to Address Government REOs, Via DSNews

Radar Logic to Propose Plan to Address Government REOs 

Blog posted via DSNews

Radar Logic plans to publish a response to the government’s proposal to sell pools of foreclosed homes to investors to rent.

Federal agencies, including theFederal Housing Finance Agency (FHFA), HUC, and The Treasury Department  recently issued a Request for Information and will be accepting proposals for how best to deal with the large inventory of foreclosed homes held by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).

While the current thinking is that selling pools of properties to investors under the condition that they rent them for a specified period of time – thus keeping them off the market in the short-term – is ideal, federal officials are accepting alternative proposals.

In its RPX Monthly Housing Market Report for August, Radar Logic expressed concerns that selling homes in bulk to investors might negatively affect home prices in the broader market.

“Unless careful steps are taken to prevent it, we fear that bulk sales of REO properties could have an adverse effect on the appraised values of homes, and therefore home sales,” Radar Logic states in its report.

Radar Logic believes the REOs sold in bulk to investors will come at lower prices than if they were sold individually – prices much lower than non-distressed sales, and these low prices could lead to low appraisals for other homes on the market.

“Even if local appraisers do not use the bulk-sale properties as comps, there are many automated valuation models (AVMs) that would likely incorporate the prices of those homes unless there was some way to designate them as bulk-sale properties,” Radar Logic states in its report.

Radar Logic also expressed concern that the bulk sales would translate to large losses on Fannie Mae’s and Freddie Mac’s books – losses that ultimately would be absorbed by taxpayers.

Radar Logic will present its two-step strategy of reducing the GSEs’ REO inventory to FHFA next month.

First, Radar Logic proposes there be no more foreclosures. Instead, all distressed mortgages would be restructured.

Distressed mortgages would be replaced with bundles of debt and equity securities, which would be distributed to investors.

Secondly, the GSEs would rent their REOs through private-sector property managers. The GSEs would continue to own the properties rather than sell them to investors to rent.

Shadow Inventory is shrinking… or is it?

Shadow Inventory is shrinking…

I posted the article “Industry’s Shadow Inventory of Distressed Homes Shrinks” on my Facebooktoday. It is a good article and talks about “shadow inventory” based on the Data that is available. For those of you that aren’t clear on what shadow inventory is – It is the amount of properties that are pending foreclosure. Borrowers that are in default and have received notice that their property will be foreclosed. It might even include foreclosed property that just hasn’t been released to the market yet. And yes, that number is shrinking.

In Arizona, we are outselling foreclosures faster than they are hitting the market. Good news right? If the Data is correct, we should be relatively stable in Arizona, in about a years time.  That is the key…the available Data. I suspect that the “default” numbers that they measure are for borrowers who have received the notice of default. What about the borrowers that haven’t yet? There has been a tremendous slow down in issuing the notices. Is the number of borrowers in default – that have not been served the notice available? I know of people that have been in default for over a year, and still not received a notice.

Another variable would be the borrowers that are trying to stay current but will ultimately throw the hat in either because they really have to or it just makes economic sense for them to do so. There is a trend termed “strategic default” that is becoming more and more common place. If the trend continues to grow – well then, so will our defaults. Obviously jobs are a tremendous factor. Our job market is improving – if it stays the course, only then will I really buy into the shrinking inventory.

I was recently at a meeting where they made a cartoon with a fortune teller and the crystal…at the end – they just threw the ball away. Our economy will get better and so will the housing market. Question is when -