Arizona law professor Brent White says the only thing standing between many "underwater" homeowners and a better financial future is a misguided sense that walking away from a loan commitment is morally wrong.
White, an associate professor at University of Arizona's James E. Rogers College of Law, has spent the past few months presenting his argument to other lawyers, real-estate professionals and the national media.
It started with a 50-page discussion paper he published in October, in which White argues that underwater homeowners, those whose unpaid loan balance exceeds the value of their home, are being manipulated into picking up the tab for a real-estate crash that borrowers and lenders created equally.
"I'm all for a society where people must take personal responsibility, but that should also apply to the banks and financial institutions" he said.
Article in the Arizona Republic
http://kathleeninarizona.com/archive_details.php?arch=789
Sunday, January 31, 2010
Saturday, January 30, 2010
"Risky Loans" but not Fannie or Freddie have short sale guidelines yet
HOME AFFORDABLE FORECLOSURE ALTERNATIVE PROGRAM - HAFA
The new HAFA program applies to the large volume of so-called "risky" loans that were issued outside of Fannie Mae and Freddie Mac guidelines during the housing boom, such as zero-down loans, option ARMs, and Alt-A mortgages that didn’t require extensive income documentation (see below, "Which Loans Are Eligible?"). As of this writing, Fannie and Freddie were developing their own, similar guidance for loans they’ve backed.
Read more:
http://kathleeninarizona.com/archive_details.php?arch=786
Which Loans Are Eligible?
The Home Affordable Foreclosure Alternative Program provides short sales guidelines for loans not owned or guaranteed by Fannie Mae or Freddie Mac (those agencies are expected to release their own, similar guidance). The following conditions also must be met:
The property is the borrower’s principal residence.
The mortgage loan is a first lien mortgage originated on or before Jan. 1, 2009.
The mortgage is delinquent or default is reasonably foreseeable.
The current unpaid principal balance is equal to or less than $729,750.
The borrower’s total monthly mortgage payment exceeds 31 percent of the borrower’s gross income.
The new HAFA program applies to the large volume of so-called "risky" loans that were issued outside of Fannie Mae and Freddie Mac guidelines during the housing boom, such as zero-down loans, option ARMs, and Alt-A mortgages that didn’t require extensive income documentation (see below, "Which Loans Are Eligible?"). As of this writing, Fannie and Freddie were developing their own, similar guidance for loans they’ve backed.
Read more:
http://kathleeninarizona.com/archive_details.php?arch=786
Which Loans Are Eligible?
The Home Affordable Foreclosure Alternative Program provides short sales guidelines for loans not owned or guaranteed by Fannie Mae or Freddie Mac (those agencies are expected to release their own, similar guidance). The following conditions also must be met:
The property is the borrower’s principal residence.
The mortgage loan is a first lien mortgage originated on or before Jan. 1, 2009.
The mortgage is delinquent or default is reasonably foreseeable.
The current unpaid principal balance is equal to or less than $729,750.
The borrower’s total monthly mortgage payment exceeds 31 percent of the borrower’s gross income.
Sunday, January 24, 2010
Maricopa County Tax Lien Auction
Tax-lien timeline
Year 1
January: A lien for taxes is attached to the property even though the amount of taxes due will not be determined until the following fall. The county assessor notifies each property owner of the property's assessed value.
August-September: The county Board of Supervisors approves the property-tax rate, and residents receive their annual property-tax bill.
October: The first half of the property-tax bill is due.
Year 2
April: The second half of the Year 1 property tax is due.
December: The county treasurer compiles a list of all parcels with delinquent property taxes for publication.
Year 3
January: The Treasurer's Office publishes the list in a newspaper and on the Internet.
February: An online auction is held to sell the tax liens to investors. Bidders compete for the best annual interest rate, bidding down from 16 percent in whole-digit increments (1 percent, 2 percent, etc.) Any liens not sold to investors are "struck" to the state but can be purchased later for 16 percent interest.
Year 6
February: A lien investor can seek a judgment for foreclosure of the tax-delinquent parcel in court if the investor still has not been repaid with interest.
Year 13
February: If no foreclosure action has been initiated 10 years after the date of purchase, the lien is extinguished.
Source: "Arizona Property Tax Lien Primer" by attorney Mark Manoil.
Read article to see how to invest:
http://kathleeninarizona.com/archive_details.php?arch=784
Year 1
January: A lien for taxes is attached to the property even though the amount of taxes due will not be determined until the following fall. The county assessor notifies each property owner of the property's assessed value.
August-September: The county Board of Supervisors approves the property-tax rate, and residents receive their annual property-tax bill.
October: The first half of the property-tax bill is due.
Year 2
April: The second half of the Year 1 property tax is due.
December: The county treasurer compiles a list of all parcels with delinquent property taxes for publication.
Year 3
January: The Treasurer's Office publishes the list in a newspaper and on the Internet.
February: An online auction is held to sell the tax liens to investors. Bidders compete for the best annual interest rate, bidding down from 16 percent in whole-digit increments (1 percent, 2 percent, etc.) Any liens not sold to investors are "struck" to the state but can be purchased later for 16 percent interest.
Year 6
February: A lien investor can seek a judgment for foreclosure of the tax-delinquent parcel in court if the investor still has not been repaid with interest.
Year 13
February: If no foreclosure action has been initiated 10 years after the date of purchase, the lien is extinguished.
Source: "Arizona Property Tax Lien Primer" by attorney Mark Manoil.
Read article to see how to invest:
http://kathleeninarizona.com/archive_details.php?arch=784
Friday, January 22, 2010
Arizona Housing Recovery pushed back to 2014
Arizona has lost more than 210,000 jobs in the past 24 months, according to Elliott Pollack, a Scottsdale-based economist.
"It will be 2014 before we get back to 2007's employment level in the state," Pollack told the crowd at the Arizona Biltmore Resort.
He said that he expects metro Phoenix's housing market to start improving near the end of 2012 but that it won't be until 2014 when the area's supply of available houses and demand for those homes are back in balance.
Read entire article:
http://kathleeninarizona.com/archive_details.php?arch=783
"It will be 2014 before we get back to 2007's employment level in the state," Pollack told the crowd at the Arizona Biltmore Resort.
He said that he expects metro Phoenix's housing market to start improving near the end of 2012 but that it won't be until 2014 when the area's supply of available houses and demand for those homes are back in balance.
Read entire article:
http://kathleeninarizona.com/archive_details.php?arch=783
Thursday, January 21, 2010
Obama Admin. needs to do more to Prevent Foreclosure
USNEWS By Luke Mullins , On Tuesday January 19, 2010
Nearly a year after the Obama administration unveiled its ambitious housing rescue program, foreclosure tallies continue to break records. Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," RealtyTrac CEO James J. Saccacio said in a statement. "Many of those delinquencies will end up in the foreclosure process in 2010 and beyond."
The number of so called "strategic defaults" more than doubled, to 588,000, from 2007 to 2008, according to a study by Experian and Oliver Wyman. A separate 2009 survey found that more than a quarter of all existing defaults were strategic. Meanwhile, a growing number of academics are touting the financial benefits of walking away. "Homeowners should be walking away in droves," Brent T. White, a University of Arizona law school professor, said in a recent paper. "The financial costs of foreclosure, while not insignificant, are minimal compared to the financial benefit of strategic default."
The case for strategically defaulting is linked to negative equity, or owing more on your home than it is worth. With home prices at the national level having dropped roughly 30 percent from their 2006 peaks--and a great deal more in certain bubble markets--a considerable chunk of property owners are now in this fix. Nearly 1 in 4 borrowers currently have negative equity, according to First American CoreLogic. And rather than continuing to make payments on an investment that's now worth significantly less than what they paid for it, many borrowers are throwing in the towel.
Read more:
http://kathleeninarizona.com/archive_details.php?arch=782
Nearly a year after the Obama administration unveiled its ambitious housing rescue program, foreclosure tallies continue to break records. Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," RealtyTrac CEO James J. Saccacio said in a statement. "Many of those delinquencies will end up in the foreclosure process in 2010 and beyond."
The number of so called "strategic defaults" more than doubled, to 588,000, from 2007 to 2008, according to a study by Experian and Oliver Wyman. A separate 2009 survey found that more than a quarter of all existing defaults were strategic. Meanwhile, a growing number of academics are touting the financial benefits of walking away. "Homeowners should be walking away in droves," Brent T. White, a University of Arizona law school professor, said in a recent paper. "The financial costs of foreclosure, while not insignificant, are minimal compared to the financial benefit of strategic default."
The case for strategically defaulting is linked to negative equity, or owing more on your home than it is worth. With home prices at the national level having dropped roughly 30 percent from their 2006 peaks--and a great deal more in certain bubble markets--a considerable chunk of property owners are now in this fix. Nearly 1 in 4 borrowers currently have negative equity, according to First American CoreLogic. And rather than continuing to make payments on an investment that's now worth significantly less than what they paid for it, many borrowers are throwing in the towel.
Read more:
http://kathleeninarizona.com/archive_details.php?arch=782
Wednesday, January 20, 2010
Mortgage News - FHA Making Changes
The FHA will raise the up-front Mortgage Insurance Premium, paid by borrowers, from 1.75 percent to 2.25 percent as well as request legislative authority to increase the maximum annual MIP that the FHA can charge. This is the second time in two years that it has raised the premium.
In addition, in order for new borrowers to qualify for the 3.5 percent down payment program, they will now be required to have a minimum FICO score of 580. Borrowers with a lower score will be required to put down at least 10 percent.
The FHA will also reduce allowable seller concessions, or how much the seller can help the buyer, from 6 percent to 3 percent. The change will give borrowers a greater financial stake in their home purchases, as well as brings the FHA into conformity with industry standards on seller concessions.
Read entire article
http://kathleeninarizona.com/archive_details.php?arch=781
In addition, in order for new borrowers to qualify for the 3.5 percent down payment program, they will now be required to have a minimum FICO score of 580. Borrowers with a lower score will be required to put down at least 10 percent.
The FHA will also reduce allowable seller concessions, or how much the seller can help the buyer, from 6 percent to 3 percent. The change will give borrowers a greater financial stake in their home purchases, as well as brings the FHA into conformity with industry standards on seller concessions.
Read entire article
http://kathleeninarizona.com/archive_details.php?arch=781
Tuesday, January 19, 2010
Scottsdale Golf Clubs lower memberships
A lingering recession has caused some tough conditions for area golf courses throughout the valley financially, primarily due to the loss of golf members. Scottsdale country clubs have cut membership costs and opened their courses to non-resident players. Golfers are trading down luxury golf to more affordable courses.
Read more: http://kathleeninarizona.com/archive_details.php?arch=779
Read more: http://kathleeninarizona.com/archive_details.php?arch=779
Monday, January 18, 2010
What Happens after Foreclosure?
What Happens After Foreclosure?
January 11, 2010 by Ilyce R. Glink
Summary: What happens to your credit after foreclosure? Millions of Americans have already gone through foreclosure or are facing foreclosure proceedings. How do you recover from foreclosure Your credit score will definitely take a substantial hit, and that will take a long time to recover from. It may be several years before your credit recovers and you can get financing for a new mortgage. While you are waiting, take the time to rebuild your credit score after foreclosure.
Read entire article:
http://kathleeninarizona.com/archive_details.php?arch=774
January 11, 2010 by Ilyce R. Glink
Summary: What happens to your credit after foreclosure? Millions of Americans have already gone through foreclosure or are facing foreclosure proceedings. How do you recover from foreclosure Your credit score will definitely take a substantial hit, and that will take a long time to recover from. It may be several years before your credit recovers and you can get financing for a new mortgage. While you are waiting, take the time to rebuild your credit score after foreclosure.
Read entire article:
http://kathleeninarizona.com/archive_details.php?arch=774
Saturday, January 16, 2010
Short Sale Fraud - Second lien holders asking to be paid off the HUD settlement statement
In order for a short sale with two loans to happen, the second lien holder has to drop the lien.
If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.
In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
"They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
Read the entire story by Diana Olick:
http://kathleeninarizona.com/archive_details.php?arch=771
If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.
In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
"They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
Read the entire story by Diana Olick:
http://kathleeninarizona.com/archive_details.php?arch=771
Highest Foreclosure Rates by State
Foreclosure Rates
Foreclosure filings, defined as a default notice, bank repossession or auction sale notice, were up almost 14 percent in December 2009 from the previous month, and showed an 15-percent increase from a year ago, according to Realty Trac's U.S. Foreclosure Market Report. In December 2009, one in every 366 households in the country had received a foreclosure filing.
1. Nevada
Rate: One in every 94 households
2. Arizona
Rate: One in every 132 households
3. Florida
Rate: One in every 158 households
4. Idaho
Rate: One in every 159 households
5. California
Rate: One in every 165
6. Utah
Rate: One in every 200 households
7. Michigan
Rate: One in every 225 households
8. Illinois
Rate: One in every 294 households
9. Georgia
Rate: 1 in every
10. Hawaii
Rate: 1 in every 330 households
Foreclosure filings, defined as a default notice, bank repossession or auction sale notice, were up almost 14 percent in December 2009 from the previous month, and showed an 15-percent increase from a year ago, according to Realty Trac's U.S. Foreclosure Market Report. In December 2009, one in every 366 households in the country had received a foreclosure filing.
1. Nevada
Rate: One in every 94 households
2. Arizona
Rate: One in every 132 households
3. Florida
Rate: One in every 158 households
4. Idaho
Rate: One in every 159 households
5. California
Rate: One in every 165
6. Utah
Rate: One in every 200 households
7. Michigan
Rate: One in every 225 households
8. Illinois
Rate: One in every 294 households
9. Georgia
Rate: 1 in every
10. Hawaii
Rate: 1 in every 330 households
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About Kathleen Mazzocco
- Kathleen Mazzocco, Realtor in Anthem, AZ Relocation to Scottsdale, AZ
- Scottsdale, AZ, United States
- Kathleen has worked with a variety of clients and employees from across and outside of the country, and this has given her a firm grasp of all the details that need to be considered when buying a home in Scottsdale, Anthem, or other areas of Phoenix, Arizona. Kathleen is a AZ Corporate Relocation Professional, and Buyer's Agent. She doesn't just help you find the home you want, she also insures that you're settling in well and that you have all the information you need in order to enjoy the highest-quality lifestyle Arizona has to offer. Begin your plan moving to Arizona with Kathleen today. It's a buyer's market right now, so there are great opportunities for you to land the home of your dreams for much less than you ever imagined possible. Acquiring property foreclosures, short sales, and bank owned homes are ways you can save in today's market. As Certified Distressed Professional she can negotiate the best possible price and terms for you. Please browse through Kathleen's website and let Kathleen Mazzocco help you come home to Arizona,search the newest home listings at www.KathleenInAZ.com.