Phoenix Foreclosures Snapshot - November 2009

Phoenix foreclosures comprise 30.8% of all real estate listings in the metropolitan area. Foreclosure listings are comprised of REO property (bank owned) and short sales. REO property used to be the majority of active listings in the foreclosure arena. However, bank owned properties have been on a decline for most of 2009. They are being replaced by short sales because more distressed homeowners are seeing short sales as a better alternative to foreclosure.

The chart indicates 12,539 foreclosure listings in the Phoenix real estate market to begin November 2009. Since there are 32,351 total listings in the Phoenix market (seen in my last post), foreclosure listings make up almost 39% of all listings in the area. Of that 39%, 35.2% (4,417) are REO listings and 64.8% (8,122) are short sales. There are several reasons for the decline in REO property listings over the last year:

• the federally mandated foreclosure moratorium
• banks for selling more properties in bulk to large-scale investors
• banks are taking chunks of foreclosure properties and turning them into rentals
• more properties are being sold at public-type auctions

Homeowners are increasingly seeing short sales as a viable alternative to foreclosure. Although the short sale process can take between three and five months to complete, buyers in the Phoenix area real estate market are paying much more attention to short sales. The percentage of completed short sale transactions continues to grow each month in the Phoenix area.

Days on Market for Phoenix Foreclosures

Foreclosure listings have been on the market for an average of 80 days less than their counterparts -- "normal" listings -- during 2009. The second chart indicates that current foreclosure-type listings have been on the market for 105 days, while normal listings have been on the market for 182 days. The obvious reason is the difference in price between two categories of listings. REO property and short sales are always priced much lower than normal sales making them much more attractive to home buyers.

It can also be seen by the chart that overall days on the market has been steadily trending downwards for Phoenix area foreclosures. However, if we were to isolate REO properties we would find that the average sold home would be on the market for less than 60 days. The longer selling cycle for short sales is what keeps the foreclosure "days on the market" higher.

Short sale your home

Homes for sale in Phoenix increase slightly to begin November 2009

MLS listings in the Phoenix area were up slightly for the second consecutive month to begin November 2009 (highlighted in orange).  This is a contrast to the previous nine months when active homes on the market dropped a whopping 23,500 properties from 54,538 in December 2008 to 30,995 in September 2009 (highlighted in yellow). There are currently 32,351 active residential listings in the Phoenix area real estate market.  This includes both "normal" and foreclosure homes for sale.

This slight increase in homes for sale will do little to impact the demand in our current real estate market, especially for foreclosures. The Phoenix real estate market has averaged about 8,700 home sales in the six-month period from April through September 2009. Phoenix home sales for October are expected to be right around 8,300 properties. Much of this demand in Phoenix is due to affordable home pricing and the $8,000 tax credit. The $8,000 tax credit is currently set to expire at the end of this month, but the federal government is evaluating extending it into 2010.

Phoenix Area Foreclosures

The number of Metro Phoenix foreclosures increased to begin November 2009. The total increase was about 550 homes.  This includes both real estate short sales and REO property (bank owned homes).  Look for the number of foreclosures to increase further as short sales continue to be increasingly popular and banks have inventory they have yet to release.  The chart indicates approximately 38% of all active homes for sale over the last six months have consisted of foreclosure-properties (highlighted in blue).

My next post will look deeper into the foreclosure market and compare the number of short sales versus the number of bank owned properties currently for sale in the Phoenix real estate market.

Learn about the short sale process

Welcome to another in a series of video tours brought to you by ValleyWideHomes.com and Metro Phoenix Homes LLC. Today's tour focuses on Maricopa Homes for Sale and brings us to the subdivision of Tortosa in the Town of Maricopa.  Maricopa is approximately 30 miles south of Phoenix Sky Harbor Airport, but only 20 miles south of the Phoenix Township of Ahwatukee, Arizona.

Maricopa rapidly changed from a rich agricultural area to vibrant and exciting new city with master planned communities.  On average, there were just under 700 active homes for sale in Maricopa during each month of 2009. Maricopa calls itself "a city with something for everyone and opportunities for all where a handshake is still honored, community involvement is welcomed, and a small town feel is ever present."

The subdivision of Tortosa is heralded by a dramatic entryway as well as several common areas with large and expansive views. Today we will be visiting a home for sale in the subdivision of Tortosa that first became available in November of 2009.

Built by Shea Homes in 2006, this home sits on an a corner lot that's just over one quarter acre. If you're interested in more information about this Maricopa home for sale --  contact information will be provided at the end of the video as well as in this blog.  This house has 2,787 square feet with three bedrooms three full bathrooms a living room, family room, a three-way fireplace, dining room and a two-car garage.  But there's MORE. Watch the video and learn about the three bonus rooms. Let's have a look at this Maricopa home for sale in Tortosa...

Learn about the Real Estate Short Sale Process

"How can I improve my credit score fast?" -- Arizona mortgage company helps  provide an answer

This is part five of a five-part series on the mortgage lending process. In the first 4 parts of this series Arizona  loan officer Craig A. Bohall took us on a journey that began with an introduction to the mortgage process, followed by "thinking like an underwriter" to get your loan approved, the "4 C's" of mortgage lending (with a 5th "bonus C"),  the important " when do I lock my interest rate," and finally In part  5 Craig will talk about what's on many people's minds: "how can I improve my credit score fast?"

Credit repair is not something that can be accomplished overnight.  If you are applying for a loan from an Arizona  mortgage company  there are certain things you should understand.  Craig will take you on a video tour and provide tips on improving your credit to help you get a mortgage loan.

Credit repair will help you in the mortgage lending process.  Credit is made up of five primary categories:

1.  payment history
2.  amounts owed
3.  blanks of credit
4.  new versus old credit
5.  types of credit

This video will help you start the process of repairing your credit that you can purchase a home.

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

  Still wondering "how can I improve my credit score fast?"

Part 4 of the series

Entire Series

Get a Mortgage Loan Approved

Am I wasting everyone's time if I accept this Chase short sale?

The seller has a first and second mortgage with Chase. Both mortgages are purchase money mortgages. The would-be sellers tried doing a loan modification over the summer but they gave up because the result of the loan modification was a "higher" monthly payment. Go figure that one. My potential clients did not make their July 1st payment after the loan modification failed. However, they waited until one week ago to ask me to short sale their house. Take note of the fact that the loan is 149 days past due.

I received authorization to talk to Chase about the potential short sale yesterday. Fortunately, and because the sellers tried a loan modification, Chase never sent a notice of default and there are no foreclosure proceedings in process. The first mortgage would not talk to me about the second mortgage and sent me on a long hunt to find the correct number to talk to the second mortgage department. Here is what I found out after six phone calls/transfers:

• the "home equity collections department" handles the second mortgage until it is 119 days past due
• the second mortgage was still residing in the home equity collections department because of the attempted loan modification
• my phone call brought attention to the fact that the loan modification process is over and my potential clients are simply delinquent
• the home equity collections department will no longer talk to me because the delinquent loan is past the 119 day marker
• they said the account was being sent to the "recovery" department (oh oh) as of November 1
  

I was able to talk to the recovery department about the prospect of a short sale. The recovery department, which of course is not nearly as much fun as the collections department, was much more serious about the matter. Here I was told that the focus of this department was to recover as much of the $52,000 balance as possible. I was told they would start out by asking for between 50 to 60% of the balance to approve the short sale.

I don't know my sellers very well, but I do know that proposition doesn't stand a chance. Faced with such a large amount, my sellers would forego the short sale process and let the property go into foreclosure. After reminding the person in the recovery department that Arizona is a non-deficiency state -- and that there was no real benefit to Chase in letting this go to foreclosure -- the person on the other side of the phone gave me these options:

1. convince my potential client to bring some money to the table
2. Hope that the first mortgage (held by a different department of Chase) would do more than allocate the standard $3000 to the second mortgage; this "recovery department" person suggested that perhaps the first mortgage Department of Chase could allocate $20,000 -- $25,000 to the second mortgage Department to make a short sale work

I reminded this person that no one wanted to waste their time by taking a potential buyer through the short sale process and then finding out that the second mortgage Department (excuse me -- the recovery department) would nix the sale. I also reminded him that both departments were in the same company and that he was simply talking about an exercise in accounting.

This recovery department person seemed to be unfazed. He suggested that I take the short sale listing, find a buyer, present the contract and short sale package to Chase and "see what happens."

I really don't consider this to be "profound" or worthwhile advice.

Anyone have any experience with this situation and Chase (JP Morgan)?

Understanding the short sale process

Phoenix area homes for sale

$8000 Tax Credit Fraud under IRS Scrutiny

According to the Wall Street Journal, the IRS is reportedly examining more than 100,000 suspicious claims for the $8000 dollar tax credit and is investigating 167 "criminal schemes" involving the credit. IRS officials declined last week to describe the suspected schemes or provide additional details. However, they did say they have identified the different types of potential fraud and matched them against their compliance program.

We could speculate about how people are trying to commit fraud with the $8000 tax credit.  Perhaps they are modifying closing statements, commonly known as HUD-1's to make it appear the house was purchased in the correct tax year. Perhaps they are taking incorrect tax advice from their accountants.  Perhaps people are modifying HUD-1's to make it appear that they bought a house -- when in fact they did not. Regardless, the IRS taking it very seriously.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.

Metro Phoenix homes for sale

Mortgage Lending Process| Arizona Mortgage Loan

Do you want to appear like a knowledgeable consumer? What questions should you ask when applying for an Arizona mortgage loan? What questions make you look like a "novice" when speaking to a mortgage broker? Here is a sample of the wrong questions to ask when interviewing a potential mortgage company:

• what are the interests rates today?
• what kind of interest-rate can your company give me?

Here is the right question to ask:

• what are the markets doing today?

Watch this video and learn what your mortgage broker should know about interest rates. Beware of any loan officer in an Arizona mortgage company who is not aware of (or can not talk about)  jobless claims, the consumer confidence number, unemployment numbers, or when the Federal Reserve Chairman and Board of Governors are meeting.

Watch this video and learn the basics about the markets and economic indicators that affect interest rates. But don't be concerned -- you don't have to be an expert mortgage broker to get the best interest rates.  You simply simply need to find an expert in the mortgage lending process who will guide you through the intricacies of obtaining a mortgage loan and locking your interest rate at the correct time.

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Part 3 of the series

Get a Mortgage Loan Approved

Arizona Mortgage Company talks about the lending process

This is part three in a five-part series that explains what you should know as a potential homebuyer about obtaining a mortgage loan.  In this video you will hear a detailed account of how to successfully obtain a loan in Arizona and pick the right company for you.  Part one of this series was an overview of the mortgage lending process and part two provided some insightful comments about how to get your loan approved by "thinking like a mortgage company underwriter."

This video  will discuss the four "C's" lenders evaluate when you apply for a mortgage loan in Arizona (and throughout the country). Here's a quick preview of the four C's:

1. credit - a look into credit and how your payment history comes into play during the mortgage process
2. capacity - essentially your ability to cover your debt
3. cash - how much do you have and what the loan underwriter sees when evaluating your finances
4. collateral - this is essentially the value of the house you want to buy

An introduction from the first video in the series:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Part 2 of the series

Get a Mortgage Loan Approved

Arizona Mortgage Lender talks about the mortgage loan process

This is part two in a five-part series that explains what consumers should know about obtaining a mortgage loan.  In this installment you will hear what it takes to get a loan approved from a lender.  Do you know one of the best secrets to getting a loan approved? Think like a mortgage company underwriter.

Although your Arizona mortgage lenders are your point of contact, the investor's underwriter has the final say on whether or not your loan will be approved.  It's important to know that underwriters get paid to "smell risk." What kinds of risks do the underwriters look for in the mortgage lending process:

• The most obvious is probably the borrowers credit; that's the most basic place for any underwriter to start.
• What about your job history? Do you change jobs like you change underwear, or are you a stalwart company veteran, or are you somewhere in between?
• Hear Craig talk about more important factors that go into the underwriter's approval process.

A good loan officer will make sure your loan application doesn't have the smell of risk in it.

An explanation from the last post:

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the  lending process.

We used Craig's mortgage lending experience and my video camera / production knowledge to produce a five-part series on the lending process. Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a real estate loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief.

Get a Mortgage Loan Approved

Arizona Mortgage Company talks about the mortgage lending process

My primary lender, Craig Bohall with Academy Mortgage, and I decided it was time to produce a series on the mortgage lending process.  There are many mortgage companies and lenders on the scene, and it's important for buyers (especially first-time buyers) to understand the mortgage lending process.

This introductory video will give a "birds eye view" of obtaining a mortgage loan, whether it be in Arizona or elsewhere.  Many times a buyer doesn't get all the information that he or she requires because they don't know how to ask the right questions.  Perhaps the mortgage lender/company assumes the buyer knows certain facts about mortgage lending that the buyer really doesn't even have a clue about. I think that happens in all industries -- the industry professional knows so much about the industry and sometimes assumes it's common knowledge. So we used Craig's mortgage lending experience and my video camera / production knowledge to produce a five-part series on the mortgage process.

Craig has been involved in the real estate industry for 15 years, but he specifically has been a loan officer for the past eight years.  Craig has worked for several Arizona mortgage companies and has found a home at Academy Mortgage.  I would highly recommend Craig if you are looking for a mortgage loan in the state of Arizona.  Picking the wrong mortgage company can cause a lot of grief. In future series Craig explains many topics  that are important to the mortgage process.

The Arizona real estate market is volatile enough.  The last thing you need is to work with an Arizona mortgage lender that is not experienced and doesn't know how to watch the key indicators when locking a mortgage rate. We hope you enjoy these videos.