Phoenix: "Now Is The Time To Buy Real Estate". (mortgage, moving)

[Burning Madolf]

Originally Posted by Zippyman

Foreclosures are actually much faster than short sales in az- after the notice is filed, they can sell the house in 90 days (if they accept the bid at the trustee's sale).

I've got an offer in on a short sale that was written feb of last year that hasn't been approved or denied yet. They could have foreclosed & had their money 9 months ago.

Wow, that's unbelievable.

[MN-Born-n-Raised]

A lot of people are comparing Florida "Shadow Inventory" to Arizona. That's a terrible comparison. Read why Foreclosure backlogs will take years to clear

Look for the table labeled: "Time it would take to clear the supply of homes in foreclosure or have seriously delinquent mortgages at the current rate of foreclosure sales."

Notice that NY, NJ and Washington DC have a very slow process and homes are not hitting the market (greater than 50 year pace to clear the pipeline). Florida's possible backlog pace is 8 times that of Arizona. Notice that Arizona has the fastest "pipeline" at 1.3 years. The bottom line is that foreclosures don't go through the courts in AZ.

The message is that the main element of "shadow inventory" isn't a factor in AZ as compared to many other States.

By the way, what happened to all of the Phoenix Real Estate Bears??

[Captain Bill]

Originally Posted by MN-Born-n-Raised

...The message is that the main element of "shadow inventory" isn't a factor in AZ as compared to many other States.

By the way, what happened to all of the Phoenix Real Estate Bears??

They're just hibernating ...

The shadow inventory has not been a factor for AZ for a long time, but many have not wanted to believe that.

• There were 569 Notices of Trustee Sale issued during the first few days of 2012.
• In the same period 2011, there were 1,389 NOTS.
• .....That is 59% fewer NOTS.

I've posted the attached chart, below, several times showing the continuing decline of the REO's, including the REO's that are being held back, and the Pending Foreclosures (NOTS issued). Each time, as the chart indicates, the inventory has shown a decline. Chart is courtesy of the Cromford Report.

Below are the numbers from that chart as of Jan 1, 2012. It is for all zip codes in the Metro area.

• 1,458.......Active REO's
• 4,480.......Unlisted REO's
• 16,300.....Pending Foreclosures, (NOTS issued---(Manyof these homes are listed as Active on the MLS, and some are already under contract showing AWC, waiting for bank approval, and some may be already in Pending status which is bank approved and in escrow))

[AZ Tracy]

Here is an interesting article: Phoenix-area housing may be on the mend

[ReadyFreddy]

Phoenix real-estate agent Brett Barry with HomeSmart thinks "lenders are just kicking the can down the road," drawing out the foreclosure process so the market looks better than it is actually doing.

"Any stabilization in 2011 is a temporary bottom," he said. "Banks are now letting many owners miss 24 to 36 payments before finally foreclosing. This is a sea change as these homes don't appear on any radar screens until they do foreclose."

I don't understand that, from the article. Why would banks voluntarily draw out the foreclosure process? It costs them a lot to carry those non-performing loans and to foreclose. And why would they want to let people miss 24-36 payments, and let that be known? Isn't half the valley going to look at that and think, "Gee, if I pocket my next 36 payments, do I even need credit for the next 7 years?" Or is the gov't. subsidizing this stance, in hopes of bolstering recovery?

[Zippyman]

Originally Posted by ReadyFreddy

I don't understand that, from the article. Why would banks voluntarily draw out the foreclosure process? It costs them a lot to carry those non-performing loans and to foreclose. And why would they want to let people miss 24-36 payments, and let that be known? Isn't half the valley going to look at that and think, "Gee, if I pocket my next 36 payments, do I even need credit for the next 7 years?" Or is the gov't. subsidizing this stance, in hopes of bolstering recovery?

They want to draw out the process because they service the loan, they don't necessarily own the note.

The short sale I've been trying to purchase for almost a year is serviced by Nationstar bank, but the "owner" of the note is "First Horizon Mortgage Pass-through Certificates series FHAMS 2005-FA9". That might even be you, through your IRA or pension...

The servicer gets paid every month by the actual investor for collecting the payments, or if the property is in default, for arranging insurance, making sure the doors are locked, cutting the grass, etc. The fees for some of these services are substantial -

Attorneys General Draw a Bead on Banks Force-Placed Insurance Practices

" Last year, a leading force-placed insurer, Assurant Inc, collected roughly $2.7 billion of premiums through its specialty insurance division, which is primarily devoted to force-placed insurance. Of that it paid out claims equaling 36% of its take — though in the company's other lines of business, a 70% claims-to-premiums ratio is the norm."

The paychecks stop when the property is sold.

[ReadyFreddy]

But who pays the Assurant premiums and why does Assurant get to decide how long the property stays in foreclosure? I'm not being contrary, just trying to understand. I'd always heard banks naturally want to minimize the non-performing loans on their balance sheets, and the ease of short selling is there to avoid foreclosure because short selling is faster and less costly (to the bank). By 'the bank' I mean the owner of the note.

[Zippyman]

Originally Posted by ReadyFreddy

But who pays the Assurant premiums and why does Assurant get to decide how long the property stays in foreclosure? I'm not being contrary, just trying to understand. I'd always heard banks naturally want to minimize the non-performing loans on their balance sheets, and the ease of short selling is there to avoid foreclosure because short selling is faster and less costly (to the bank). By 'the bank' I mean the owner of the note.

If it was on the bank's balance sheet, sure - but if they are just the servicer, they want to stretch things out. It's well-known in the industry that short-sales are processed with light-speed if the servicer is the bank that actually owns the note. Those "pre-approved" short sales, that only take a month to close are usually owned and serviced by the same bank. Citibank was calling customers who weren't even in default and lowering rates on notes they held, but if they're just the servicer, there is no urgency.

Usually, the way to make a short-sale start moving is to track down the investor - Fannie-Mae set up a "help desk" that often gets results in just a few days, if Fannie is holding the note.

As for the whole "short-selling is less costly thing" - I know it's often repeated, but compared to the fraud & waste caused by short-sales, I just don't see it myself.

[bgray9]

Don't assume that what the banks do makes sense. That's my conclusion after having dealt with banks on a couple of short sales in the Phoenix metro area.

[ReadyFreddy]

Well, most of the banks are public companies who have to answer to their shareholders when they have a balance sheet full of non-performing assets quarter after quarter.

I don't really know how the servicing is split out. Are most mortgages sold to investors as CMO's? So the "bank" (or whoever we write our mortgage payment to) is really just collecting the money and passing it through to the investors?

If the loans exist on the investors' balance sheet but the banks have all the say on how fast to foreclose, that's a little screwy. But I've seen lots of screwy things in the industry, including how appraisers were hired before the housing crash.