Real Estate Information

Every day I see ads on TV and the newspaper promising solutions to save people from foreclosure by negotiating a mortgage modification or short sale.  Many of these companies have professional sounding names, slick websites and made grand promises. It almost sounds too good to be true! 

After your initial information is gathered many ask for negotiation fees to be paid up front.  I'm also seeing marketing from real estate brokers who are requiring sellers to pay money up front for these services.  My understanding is that licensing through the Arizona State Banking Department is required in order to negotiate financing on behalf of another party.  There is absolutely no reason or requirement to pay any fees for someone to negotiate a loan modification and I hate to see people who can't afford to pay these fees get taken advantage of.  Simply go to www.MakingHomeAffordable.gov and you'll find information to help you determine if you would qualify for a mortgage modification.  The bottom line is that there are no fees to be paid upfront to any company to participate in the government's loan modification or refinance program.

I get so frustrated when financially distressed homeowners get caught up in these scams and pay their hard earned money to folks who pocket the funds and then the property still goes to foreclosure!  There are a few requirements that are necessary for a loan modification:  the homeowner must have income that can be verified, they must qualify for that payment (it's almost the same type of application process as when they originally applied for and qualified for the original loan), and must be able to AFFORD the new payment.  Homeowners can pursue a loan modification and a short sale at the same time.  There is ALOT of financial information required for both these processes and if you are filling out one set of financial documents, it's just as easy to fill out both!  If the loan modification isn't approved, or the new payment offered isn't affordable, the short sale can be pursued instead. 

One business model for short sales involves a professional looking company who offers to solve all your financial problems, including a loan modification and/or a short sale.  They make an offer to purchase your home with a short sale, and then go to the mortgage company for approval of that short sale amount.  Once they receive approval they list the home for sale and attempt to find a buyer who will subsequently purchase the property at a higher price.  When the date of closing occurs the investor closes the short sale with the lender, and then resells the property (or flips it) to the new buyer, pocketing the difference as profit. 

Our office has been approached by several of these companies, asking us to list the property for sale.  We have declined these listings because I believe it's WRONG.  Taxpayers are funding this bailout of major banks and lenders.  If the property will sell on the open market to a second buyer at a higher price, then I believe it's morally wrong to participate in a "flipped" sale where the investor pockets the difference.  If the home is truly being sold short of the loan balance, and at market value, then there isn't room for profit for the investor between the short sale and subsequent sale.  While this practice might not be labeled fraudulent at this point, if you really look at this practice from an arms length position, in my opinion it's wrong for private investors to profit from a short sale where taxpayer money is being used to pay the difference between a loan balance and market value.  I believe it is wrong in the same way as it is wrong for the CEO's of these failing banks to pocket enormous paychecks and bonuses.  I've spoken to some of these business people who insist this practice isn't wrong because they are fulling disclosing the fact that the property is being resold to the mortgage company approving the short sale.  Just as it might have been "legal" for home repair contractors to greatly inflate repair prices for necessary repairs following Hurricane Katrina, I still believe it was morally wrong.

I'm proud to be part of an organization that is truly making a difference in people's lives.  That's the Distressed Property Institute.  There are currently over 8000 Realtors in the US who have spent their money and their time to take the intensive training courses to become certified as a Certified Distressed Property Experts.  These Realtors don't charge fees upfront to homesellers, and they are negotiating hundreds of short sales on a weekly basis.  The Institute continues to provide support on a weekly basis as short sale practices change and they've developed a complete system to give homeowners the best chance possible to successfully avoid foreclosure.  If you or someone you know is having difficulty making their payments, or owes more on their property than it's current market value, recommend that they find a Realtor who is a CPDE.  Consumers can access the Institutes' website at www.cdpe.com to locate a CDPE near them.

On May 20th, President Obama signed the Protecting Tenants at Foreclosure Act of 2009 (S. 896) into law.  These tenant protections are effective immediately and expire on December 31, 2012. 

In a nutshell, renters must now be allowed to remain in the home for the duration of their lease, even if the home is being foreclosed on.  The new law gives renters a minimum of 90 days notice before they must vacate.  If a new buyer plans to personally occupy the property, or the tenant's lease is month to month, or there is no lease at all the tenant is entitled to at least 90 days notice.

If there is a lease, tenants will be allowed to stay for the remainder of the lease before the foreclosing lender or new owner can proceed with eviction.  If a state offers greater protections to renters, the new law allows the stronger protections to apply. 

This bill is important and timely, because it specifies that tenants have rights and gives them protections they did not have previously.  As a broker who provides property management services, I'm thrilled that we have some guidelines that allow us to treat the tenant fairly.  Without this law, we were required to enforce the provisions of the existing lease. 

If an owner was attempting to negotiate with their lender for a loan modification, refinance or a short sale, we often didn't know until the day before the scheduled foreclosure if the the lender would postpone or stop the foreclosure auction.  This left the tenant in a precarious and stressful situation, not knowing whether or not they'd have to move.  As the property manager, my hands were tied, as I was unable to alter the lease without the owners permission, and they frequently are working furiously to keep the property. 

This new law provides a policy whereby tenants have rights, property owners have new guidelines to follow and landlords, new purchasers and lenders all know where they stand.

It's a sellers market in Casa Grande, AZ! 

Current market statistics in Casa Grande show a 3.3 month supply of available homes, according to statistics pulled from the Arizona Regional Multiple Listing System.  That's down from a high of 19.9 months of listing inventory in December of 2007, which then dropped to about a 7 month supply through the summer of 2008, hovering between 10 and 13 months supply between Oct of 2008 and December of 2008, and dropping steadly to a low of 3.3 months supply of inventory in April of 2009. 

Does that mean it's time to break out the champagne and start dancing in the streets?  It certainly is great news to see that there are 34% fewer homes for sale, 56% more homes in escrow, and 32% more closed home sales in April 2009 than in April of 2007.  What's caused this huge change?  Incredibly low interest rates, an $8000 tax credit for first time homebuyers and dramatically lower sales prices have all caused the surge in buying activity. 

The median sales price of properies sold and closed in April of 2009 in Casa Grande was $113,412, down from $184,490 in April 2007 and $167,000 in April of 2008.  The median sales price declines have slowed significantly over the first quarter of 2009 and actually increased in April to $113,512 from a median price of $110,000 in February and March of 2009. 

By Vicki Lee Parker

Last month, the Federal Reserve cut interests rates for the sixth time this year in its efforts to restrain the credit crisis. The move that reduced the rate to 1% was a shot in the arm for Wall Street, which was up 10.1% last week. But what have all these cuts meant for the average consumer?

To find out, I spoke with Mark Vitner, Wachovia economist; Bill Hardekopf, CEO of www.LowCards.com; and Jeff Williams, a mortgage consultant with Allied Home Mortgage in Raleigh, N.C.

Here’s a breakdown on how they say the low interest rates have-or haven’t-affected some key consumer finance issues.

- Credit cards. Hardekopf said that lowering interest rates doesn’t automatically mean credit card rates will decrease. But over the past year, the rates cuts have kept the average advertised credit card rates stable at about 12%.

In other words, if you have good credit, you can still find low credit card rate offers. In fact, Hardekopf said that Capital One is currently offering zero percent on balance transfers and new purchases for 12 months.

“It’s certainly possible that others (credit card companies) will do the same,” Hardekopf said. The problem is that fewer people will qualify for the lower rates.

“The advertised rates are still low, but they are reclassifying the perimeters of what is considered good credit. Now, more people are falling into the average and poor credit categories,” he said.

To qualify for these low rates, people have to do everything possible to keep their credit score high, he said. That means pay your bills on time, don’t skip payments, don’t apply for a bunch of new credit cards, and keep credit card utilization low-at most, 30% to 40% of your credit limit.

- Mortgages. Many people assume that if the Fed lowers the interest rate, mortgage rates will also decrease. That simply isn’t the case, said economist Mark Vitner. He explained that mortgages are backed by mortgage securities, which aren’t doing well right now. Still, mortgage rates are hovering at about 6.45%, which is not nearly as high as in previous major economic downturns.

- Home equity lines of credit. This is an area where consumers may see some immediate relief, said Vitner. These loans are more closely tied to the prime rate, which moves in close concert with Fed interest rate cuts and hikes. “The interest cost on (HELOCs) will be less and make it easier on consumers. That frees up a little extra income for spending,” he said.

- Refinancing loans. Clearly, lower rates make refinancing cheaper. But determining whether this is a good option is a little more complex, said Jeff Williams of Allied Home Mortgage. If you have an adjustable home loan, it should be adjusting down, which is good and there is no need to refinance. But if you have an adjustable loan that is scheduled to reset at a much higher rate, refinancing may be a good option.

A number of banks are urging people to use the low rates as an opportunity to refinance into a 15-year or 20-year mortgage loan. But Williams said this may not be a good idea for everyone. He said that unless you are very secure in your job, it may be safer to stay with a 30-year loan, which typically has a lower monthly payment than a 15-year or 20-year loan.

- Car loans and personal loans. If you are shopping for new car or a personal loan, the lower interest rates will likely mean good news for you, said Vitner. “Lower rates means it’s cheaper to borrow money.”

- Saving accounts. Lower rates ultimately mean the money you earn on your savings will decrease. Now is a good time to shop around for the best rates. Hint: Online banks such as E-Trade Bank and HSBC Direct tend to offer higher returns on savings accounts and CDs than many traditional banks.

Source: RISMedia

450 W. Casa Grande Lakes Boulevard North

$245,000
3 Bedrooms, 2 Bathrooms, 1667 Square Feet

Bay window formal dining, lovely living room with built-in entertainment center, breakfast area with gorgeous backyard views, 10 ft high ceilings, huge backyard with pool and maintenance free landscaping, and serene mountain views.

Scott Fisher will be at this home on Sunday, November 2 from 12 pm to 2 pm. Please call him at 520-836-1717 ext 111 or 520-208-5805.

Click here for a map of this location.

The Federal Reserve is expected to lower interest rates before the end of their two-day meeting, which starts today.

If they do, this will be the second time in a month. The Fed is expected to lower the rate by either half a percentage point to 1 percent or, conservatively, make a smaller quarter-percentage reduction to 1.25 percent.

The prime rate, which is used to set home equity loans, certain credit cards, and other floating rate loans, is now at 4.5 percent. These rates will fall commensurately based on the size of the cut. Mortgage rates aren’t so directly affected, but may slip as other rates decline.

Source: The Associated Press, Jeannine Aversa (10/28/08), Realtor.com

With all the wild swings of the stock market and worries about recession, you might have missed some of the mildly encouraging developments on interest rates, capital availability for loans, and the direction of the economy overall.

Tops on the list: Mortgage rates last week took a quarter-point drop, according to the Mortgage Bankers Association. Rates were down to an average 6.28 percent for 30 year fixed rate loans and 6.05 percent for 15 year. The quarter point decline came on the heels of an unusual half point increase the week before that had been tied to the wild gyrations on Wall Street.

Now it's true that six and a quarter percent for 30 year mortgages is still higher than rates were several weeks back. But in a volatile market environment like we're in, you've got to welcome ANY drop in the cost of money.

Another economic sign that got crowded out of the news by all the stock market craziness: The Conference Board's bellwether Index of Leading Indicators -- which points to the direction of the economy immediately ahead -- just took a jump UPWARD for the first time in five months! The index examines ten key metrics related to future economic growth or decline, and in the last month six out of ten were POSITIVE .

Most economists continue to forecast a recession, but the leading indicators index seems to suggest something slightly different: Slow, slogging, minimal economic growth in the months ahead. That's not great, but it doesn't fit the classical definition of a recession, which is two straight quarters of negative growth.

Add in the recent sharp declines in the cost of gasoline and heating oil, and who knows? Maybe the national economic outlook is slightly less grim than we're expecting. Maybe we're all being too pessimistic.

Also in the works that you ought to know about: A new economic stimulus package from Congress aimed at increasing employment and pumping billions of additional dollars into key segments of the economy.

On that score, one of the items already included in some versions of that stimulus package: Larger, non-repayable federal tax credits for purchasers of homes.

This time around, the credit -- which could go as high as $10,000 to $12,000 per buyer if some housing industry lobbyists get their way - will be open to all purchasers of homes in the coming year, not just first-time buyers.

Source: Realty Times

Meanwhile, median price of a new home drops to four-year low, $218,400

Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.

Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.

The median price of a new home sold in September declined by 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.

The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades.

The report on a rise in new home sales followed news last week that sales of existing homes rose in September by 5.5 percent, the largest monthly gain in more than five years.

Source: MSNBC

Edward Gately, Tribune

Existing home sales in the Valley jumped a staggering 70 percent last month compared with September 2007, overshadowing a 5.5 percent increase in national home resales for the same period.

Home resales in Maricopa and Pinal counties rose to 5,749 units last month, up from 3,383 in September 2007, according to the latest Phoenix Housing Market Letter by analyst RL Brown. For most of the past year, existing home sales have been in the minus ranges from the same pace last year, off by as much as 46 percent last September.

"The bottom of the (Valley) resale market was sometime about a year ago," Brown said. "It went on for about six months, and we were down into the 3,000 (resales) level. So the fact that we're up is great news, but that's why the percentage is so high."

The National Association of Realtors reported that sales of existing homes nationally rose by 5.5 percent last month, the best showing since a 5.7 percent increase in July 2003 during the five-year housing boom.

"The West was up 34.4 percent," said Walter Malony, association spokesman. "A lot of the gains were in California, but also in Arizona and Nevada, and we're also seeing some pickup in Colorado. In areas like Phoenix ... where there was a lot of subprime mortgage exposure and then consequently big price corrections, that's where the buyers are responding."

The unprecedented home price surge meant the Valley had further to fall when the real estate bubble burst, prompting a flood of foreclosures and plummeting values, Brown said. These are prompting higher sales, he said.

The national improvement demonstrates that buyers who have been sitting on the sidelines want to get into the market to make a long-term investment, Malony said.

"Our survey data is showing that 80 percent of these purchases are owner-occupants and other data indicates that as many as half of the buyers are first-time buyers," he said.

Of the 5,749 Valley resales last month, 2,859 were bank-owned properties, Brown said. The median price of resales last month was $170,000, while the median price of bank-owned properties was $143,000.

Median resale prices last month fell 6.6 percent from August, 20 percent from a year ago.

"What it really comes down to is there is a demand in the price point of the foreclosed units, and that's what we're seeing demonstrated," Brown said. "It's proof that the buyers are out there and the buyers will come out of the woodwork when they see what they perceive to be appropriate values. If the buyers weren't coming out of the woodwork for the foreclosures, we would be in a much, much deeper world of hurt."

Yalda Alawi, a short-sale negotiator with WestUSA Realty Revelation in Chandler, said a turnaround is a year or two away.

"In the specific area I specialize in, I've actually seen a slowdown in buyer activity," she said. "It's slow in our end of it, especially because it takes so long."

Still, Alawi said that progress is being made toward recovery.

Source: Easy Valley Tribune