Times are still tough in the Prescott area residential real estate sector, but the foreclosure market is looking up. While real estate prices, as a whole, have plummeted, prices of foreclosuresin most states are going up, according to the foreclosure listing site Foreclosuredataonline.com.

The company reported that foreclosure sale prices in Arizona saw the biggest increase, where averages went up 15.51 percent to $285,257 during the first three days of November, compared to a listing average of $246,944 during the entire month of October.

Methodology

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To drill down and get more information, see the whole article here.

Prescott Area Market Report

35 new foreclosed or short sale homes came on the market during the week of October 25-October 31, up significantly from the previous week’s 25. These made up approximately 1/3 of  homes being listed in the Prescott Arizona Area MLS system.  

There were 54 traditional listings that came on the market  last week at an average of $161 per square foot.  Compare that to the $103 per square foot average for the homes below. 

Short Sales:  7 of the 35 are short sale listings (see yellow highlight).  Short sales are priced typically a little higher than most of the REOs, but are still aggressively priced compared to traditional resale homes.

How to help speed up a short sale tips 

 To get more information about any of these listings or any others in Prescott, Prescott Valley,  Chino Valley or Dewey-Humboldt areas, feel free to contact me, or you can search by MLS number, address, or lots of other ways in our Search Prescott MLS section.  

You can get this report sent to you via email.  Sign up here.

 Get your Fico Scores/Reports

Prescott Area Market Report

25 new foreclosed or short sale homes came on the market during the week of October 18-October 24, down a bit from the previous week’s 29. These made up approximately 1/3 of  homes being listed in the Prescott Arizona Area MLS system.  

There were 49 traditional listings that came on the market  last week at an average of $190 per square foot.  Compare that to the $94 per square foot average for the homes below. 

Short Sales:  5/25 are short sale listings (see yellow highlight).  Short sales are priced typically a little higher than most of the REOs, but are still aggressively priced compared to traditional resale homes.

How to help speed up a short sale tips 

To get more information about any of these listings or any others in Prescott, Prescott Valley,  Chino Valley or Dewey-Humboldt areas, feel free to contact me, or you can search by MLS number, address, or lots of other ways in our Search Prescott MLS section.  

You can get this report sent to you via email.  Sign up here.

 Get your Fico Scores/Reports

The National Association of Realtors said Friday that sales rose 9.4 percent to a seasonally adjusted annual rate of 5.57 million in September, from a downwardly revised pace of 5.1 million in August. Sales had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters.

The median sales price was $174,900, down 8.5 percent from a year earlier, and slightly lower than August’s median of $177,300.
“There’s a mini-boom going on in the housing market,” said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications, a research firm.

The inventory of unsold homes on the market fell about 7 percent to 3.63 million. That’s a 7.8 month supply at the current sales pace, and the lowest level since March 2007. Nationwide sales are up nearly 24 percent from their bottom in January, but are still down 23 percent from four years ago.

Sales rose around the country, especially in the West, where they grew 13 percent from a month earlier. Foreclosure sales are booming in cities like Los Angeles, San Diego and Las Vegas.

First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. These buyers can also take advantage of a tax credit of 10 percent of the sales price, up to $8,000, if the sale is completed by the end of November.

The tax credit is so important to some buyers that they are adding a clause to their contracts, allowing them to back out if the sale doesn’t close by Nov. 30.

While home sales and housing construction have risen steadily after hitting bottom earlier this year, most economists believe that the worst isn’t over for home values.

Prices could see a double dip because rising unemployment is causing more foreclosures. The jobless rate, currently at 9.8 percent is expected to rise as high as 10.5 percent next year, causing more people to be unable to afford their monthly mortgage payment.

“There’s more supply that’s going to come into the marketplace,” said Stan Humphries, chief economist at real estate Web site Zillow.com. “That additional supply will outpace demand.”

With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.

Realtors and homebuilders are pressing lawmakers to do so, arguing that the tax credit is crucial to get the housing market back on its feet.

“We are not there in terms of removing the consumer fear factor,” said Lawrence Yun, the Realtors’ chief economist.

One potential roadblock, however, emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.

At a hearing on Thursday the Treasury Department’s inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old.

<<end>>

My commentary:

This could be good news for home sellers in Prescott, Prescott Valley, Chino Valley and Dewey-Humboldt.  Only time will tell.  Many of my buyers have been disappointed that homes they have been interested in have gone pending before they have a chance to put offers in.  Especially in the Prescott and Prescott Valley foreclosure markets this is happening where cash investors are picking up deals faster than usual.

See the whole article here

As some of you already know, I blogged recently about being interviewed recently by our local NBC news affiliate. 

Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure.  For the life of me, I couldn’t figure out why they were doing this.  The BPO came in at the contract price of $275k, with a net to IndyMac of $241k.  What advantage could there possibly be for them to proceed to foreclosure?

Yesterday, I figured it out.  You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009.  Guess who the investors are behind OneWest?  George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire). 

Now, listen to the deal they got from the FDIC….

Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).  They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to “sweeten the pot”, the FDIC stepped in and guaranteed the following:  For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss.  The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan.  Let’s use my clients situation as an example:

Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200 OneWest pays $334,600 for the loan We have an all cash offer of $241,000, net to OneWest.

So, let’s do the math, shall we?  The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer.  In this case, $485,200-$241,000, or $244,200.  Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called “net loss”.  So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200).

Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360.  Remember, OneWest paid $334,600 for the loan.  So, OneWest puts $101,760 in their pocket, thanks to the FDIC.  Folks, that is over $100k of our hard-earned tax dollars!

So, you ask…Why does this program hurt short sales?  Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES!  The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.) So, If I’m OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure?  And we wonder why nobody can get a Loan Modification?  Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k?  And, to add injury to insult, they have held this loan for 6 months!  Not a bad ROI, huh?

What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE!  Imagine if they could make $100k, then get a deficiency judgement!  Talk about making some big bucks!

Can you say “GREED”?

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC.  Some of them include:  Bank of America (go figure), CitiMortgage, Wells Fargo, etc. 

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website.  It’s all there, for the world to see!  They have it all layed out.  All of the formulas, worksheets, etc. 

Now, it’s up to us to bring it to the attention of our elected officials and the media.  Enough is Enough!

UPDATE 9/18/09:  I JUST READ AN AWESOME ARTICLE ON THIS, THAT GOES INTO WAY MORE DETAIL THAN MY BLOG ABOVE.  TAKE THE TIME TO READ IT WHEN YOU GET A CHANCE! CLICK HERE TO READ IT.

Wait, it gets better…The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it’s deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements).  Go Figure! 

Robert G. Hertzog

Prescott Area Market Report

29 new foreclosed or short sale homes came on the market during the week of October 11-October 17, up slightly from the previous week’s 25. These made up approximately 1/3 of  homes being listed in the Prescott Arizona Area MLS system.  

There were 52 traditional listings that came on the market  last week at an average of $133 per square foot.  Compare that to the $90 per square foot average for the homes below. 

Short Sales:  9/29 are short sale listings (see yellow highlight).  Short sales are priced typically a little higher than most of the REOs, but are still aggressively priced compared to traditional resale homes.

Thinking about a short sale?  Read these tips to make it go as quickly as possible:

How to help speed up a short sale tips 

To get more information about any of these listings or any others in Prescott, Prescott Valley,  Chino Valley or Dewey-Humboldt areas, feel free to contact me, or you can search by MLS number, address, or lots of other ways in our Search Prescott MLS section.  

You can get this report sent to you via email.  Sign up here.

 Get your Fico Scores/Reports