Arrested for Destroying a Foreclosed Home
February 21, 2010
News from Chandler, Arizona, the other day – a neighbor spotted a homeowner taking stuff out of his house, a house scheduled to be auctioned at foreclosure. And the neighbor called the police.
He wasn’t taking out the furniture. He was taking the air conditioners, the water heater, the doors, cabinets, counters, light fixtures. The story is here.
That’s quite illegal (and helps to bring down property values in the area besides). When you get a loan on a home, you promise to keep it in good shape. You’re not just committing to making payments. The article says he was arrested for criminal damage and defrauding a secure creditor.
I had wondered when we would start seeing these kinds of events. And if banks will ever start going after owners who destroy the home before the foreclosure auction. Though I imagine it isn’t worth the effort it would take to track down the owners, press charges, try to gather proof, rack up legal fees, try to collect damages from someone who most likely has no means.
Search Tucson Foreclosures
February 8, 2010
I’ve had a couple of calls recently from people who only want to look at bank owned homes in Tucson. They ask for a way to search for only foreclosures in the Tucson area.
That, we can do.
If you click up on the “Search” link at the top of the page, it takes you to a place where you can search the entire Tucson MLS. And then over on the left hand side, there’s a checkbox where you can select only short sales or only foreclosed homes.
Or you can see all foreclosed homes for sale in Tucson by clicking this link.
These are the homes that the bank has foreclosed on and relisted for sale. Most of these are as-is sales, but usually they’re at a discount as well.
From that link, once you search, you can save it to come back to it easily, have it email you updates, save favorites and whatnot. You have to register to do that, with your name and email address. Don’t worry. I’m not going to pester you if you register. But I’m certainly happy to help you if you need it!
Is Foreclosure No Longer a Social Disease?
February 2, 2010
I showed a house last week, a foreclosure, that had been completely taken apart. The picture here is of the kitchen. Or what used to be the kitchen, anyway. No cabinets, no countertops. They even took the backsplash. The appliances. Door handles. The banister on the stairs. And the entire heating and cooling system.
Which is a shame. And potentially a criminal act, I’m told.
However, I’m seeing fewer of these homes. A year or two ago, you could see a couple of these houses in a day without even trying. And even this home, while stripped of just about everything of value (I’m a little surprised the interior doors were still in place), there wasn’t damage, other than removed items. There weren’t holes kicked in the walls, or paint dumped on carpets, walls tagged with filth.
I used to see a lot of anger and frustration taken out on the foreclosed home. And I see less of that now.
In that week, I happened to have this same conversation 3 times with 3 different people. Has the prospect of foreclosure become socially acceptable? If it is okay to talk to our friends and family about our housing woes without perceived judgement, does that make us less likely to trash the place as we leave it? To have an outlet for our anger and frustration, other than the house itself?
And then there’s the walking-away-and-proud movement – comments on that post are varied, but there are strong arguments on both sides. Certainly for most of us, our home is our largest investment – but I can tell you through experience that people select the home they purchase based on an emotional choice.
What do you think? Is there less social stigma to walking away? And if so, what about the impact to your credit and the ability to purchase again? If you were faced with foreclosure, what would you do? Are you underwater and thinking about walking? I’d love to hear your thoughts in the comments below.
How Long After A Short Sale Until I Can Buy A House?
January 21, 2010
Short sales can get you out from under an unmanageable mortgage, but they don’t come without repercussions. Depending on how the short sale goes down, it can lower your credit score greatly, and you may owe taxes on the amount forgiven, as examples.
Eventually, some people want to buy another house. But with a short sale on your record, you may have to wait a couple of years before anyone will give you a home loan. My agent friend in Oakland County, Michigan, Maureen Francis has an article on her blog that explains the different rules. An excerpt:
FHA has recently changed their rule so that if a short sale occurred and all of the borrowers payments were made on time (no late payments) then they may be eligible for a new mortgage as long as the short sale was due to extenuating circumstances and not to simply take advantage of market conditions (see below). As you can imagine, this may be difficult to demonstrate. Otherwise, if any payments were made late or you cannot demonstrate extenuating circumstances, then it is a 3 year period before new FHA financing can be considered.
Fannie Mae policy is pretty straight forward – It is a minimum of 2 years to re-establish credit after a short sale.
The article is written by a lender that works with Maureen. Go check out the rest of the article here. Thanks Maureen!
Tucson Distressed Housing Market – Sales by Type and Area
September 17, 2009
I was curious today to know exactly how much of our market was distress sales. So I bring you the extra lovely chart, below:
By area of Tucson, this shows you what percent of sales in that area are short sales, REO properties (foreclosed homes sold on the resale market), and what percent were regular sales. This includes all sales from 8/1/09 to today.
Clearly, the REO market is larger than the short sale market – at least in terms of sales that are actually closing. Regular non-distress sales still are a large portion of the market in some areas – but check out the South. Well over half of the sales in South Tucson are distressed properties of some kind.
Citywide, by the way, that makes our market 10% short sales, 28% foreclosed properties, and 62% regular properties. Now that the Tucson MLS has added a short sale and REO property flag to listings, these numbers ought to be quite a bit easier to track.
At the Tucson Foreclosure Auction
September 11, 2009
I went with a friend to the foreclosure auction the other day. I’d never been to one before, sort of an odd experience.
The foreclosure auctions in Tucson are held every business day on the court house steps – though they have nothing to do with the courts. The auctions are actually run by a company out of California.
And I do mean on the steps. As in outside. Bring water. 
So the auctioneer shows up with a bunch of clipboards and contacts all the trustees to get instructions about each property – she has to check with them first to see if the sale should be delayed or if the sale should proceed. In my estimation, about 95% of the sales that day were either postponed or canceled, for no stated reason.
I wonder how many of those postponed sales are homeowners trying to work out loan modifications and short sales. A lender can postpone a sale for as long as they want to – if a homeowner is trying to work out their problems, I suspect that’d be a decent reason to postpone the auction.
Each property on the schedule for that day is read off, and the sale either declared postponed or canceled – or that property gets auctioned off right there. To bid, you have to register for the sale, which you can do the day of the auction. You need a $10,000 cashier’s check as well, in case you win the auction. If you win, that check is turned over immediately to the auctioneer and the remainder of the funds are due within 24 hours to the trustee. Which means you need to overnight another cashier’s check to where ever that trustee is located. Wiring funds, to my knowledge, is not allowed.
Every so often, people wanting to buy Tucson foreclosures at auction contact me. What most of those folks don’t realize is that you have to have cash. Cold hard money. Not a loan lined up. And there’s no inspections. Sure, you can drive by the house, maybe peek in the windows if you’re feeling brave (and like trespassing…). But buying a home at the foreclosure auction is an as-is, all cash deal. If you’re interested in that sort of thing, you can hang out at a couple auctions and see it first-hand.
Even More New Rules – SB1271 Anti Deficiency Law Change
August 5, 2009
It’s the week to update rules, apparently. Hang in there with me.
SB 1271 is an amendment to ARS 33-814, for those of you who want to do some of your own Google research. For the rest of us…
Arizona Revised Statute 33-814 says that within 90 days of a foreclosure sale, legal action can be brought against that borrower to recover any deficiency – the lender can sue you for any money that they’re owed after the property is auctioned off. BUT – a lender can’t pursue a deficiency judgement if the property foreclosed on is 2.5 acres or less and used as a single family home.
So if you’re a homeowner in Arizona, live in your own home on less than 2.5 acres, and the bank takes your home back via foreclosure, they probably can’t come after you for any money. If you don’t live on the property or if it is on 2.5 acres or more, then the bank can come after you for the difference between what is owed and what is made at the trustee sale, at the auction. (That’s a simplification, but generally correct.)
SB 1271 is a bill amending that rule, going into effect September 30, 2009. This bill says that the owner had to have “utilized” the property for 6 consecutive months in order for that owner to be exempt from a deficiency judgement. I’m told the language is a little vague – at this point, the best interpretation is that you have to have lived in the house for at least 6 consecutive months.
The Arizona Association of REALTORs has a bit of a problem with this bill, and is appealing to the governor to not enact the bill. You can see AAR’s request to stop SB 1271 here. Go ahead and read their letter to get a better idea of their objections. Some points they bring up are that it takes away an incentive for lenders to work with homeowners in distress, since they can foreclose quickly and then sue the owner for the difference. Another objection is due to the 6 consecutive months requirement – Arizona has a lot of vacation home owners, second home owners who only live here 4-5 months out of the year. Even if they own the home for many years, they may not have “utilized” it for 6 consecutive months.
I’ll let you know as updates come along.
Buying Foreclosure Homes with FHA Financing in Tucson
July 15, 2009
What home buyer doesn’t want a bargain?
More and more often in this market, I’m coming across first time home buyers looking for that special foreclosure deal – and want to use FHA financing.
FHA is an attractive option for people who intend to live in the house they purchase, because it only requires a 3% down payment. Lots of home buyers – especially first time home buyers – take advantage of programs like FHA to get into a home with low down payment.
However.
Traditional FHA financing requires that the house be in good enough condition to qualify for that loan. And quite honestly, so many of the foreclosed homes in Tucson that I see aren’t in good enough shape. I’ve participated in enough FHA financing deals that I’ve got a pretty good eye for what will and what won’t pass muster.
There’s good news though – but expect to jump through a lot of hoops.
FHA has a fix-up loan program, the FHA 203k, where you can finance fix-up costs. The funds for repairs are placed in an escrow account and are released in draws as the work is completed. And as with all FHA loans, they can be used on 1-4 unit properties that the owner will occupy.
Those loans aren’t nearly as simple, so be sure you’re working with people that understand the process!
More resources from the HUD site:
Remember that new MLS Rule on Short Sales earlier this week?
July 1, 2009
Nevermind, I guess. An update, today from the Tucson MLS:
Short Sale Searches
We now have a mandatory Short Sale field in MLS. If you select ‘yes’, your listing displays and is searchable as a Short Sale. If you select ‘no’, a field appears asking if the listing is an REO, giving you the option of having REO displayed and searchable. You are now able to go into your current listings and revise them to include these criteria. In addition, any revisions made to your current listings will require you to address this selection because it is mandatory.
My question is whether this is a public field or not. I don’t see it in the public MLS search yet. I’ve asked for clarification from the Tucson MLS staff. I’d hope they add it to their data feed, at a minimum, and at least for the bank owned homes. I’ve cobbled together a search of bank owned homes in Tucson, but having a field would sure make it a whole lot easier – and more accurate.
New Rule about Short Sale Disclosures in the Tucson MLS
June 28, 2009
News from the Tucson MLS regarding Short Sales today.
The notice, in its entirety:
After reviewing changes implemented by the National Association of REALTORS®, the MLS Board has implemented the following Short Sale rule, effective immediately.
As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.
Participants are required to disclose potential short sales to other participants by stating the following in the Agent Only Remarks: Potential Short Sale.
No references to commission or co-op fee splits, apportionments, or reductions are permitted in the MLS. In addition, documents referencing commission or co-op fee splits, apportionments, or reductions are not permitted in the MLS. The cooperating brokers do retain the right to negotiate the commission/co-op fee outside of the MLS.
Within two (2) business days of seller’s acceptance of written contract, the listing broker shall change the short sale listing’s status in MLS to ‘Active Contingent’, ‘Active CAPA’, ’Pending’ or ‘Sold’, as is appropriate per MLS Status Definitions. Disclosure of short sale shall not be made in the Property Description, Marketing Remarks, or any other publicly viewable component of the MLS without the seller’s written permission to the listing broker.
What that means is that short sales will no longer be disclosed to the home buying public unless the Seller has given written permission. So if you’re a trying to buy a home in Tucson and you’d rather avoid the short sales – as many time-sensitive buyers do – you’ll probably have to ask your agent to check the private agent-only comments for you on a house-by-house basis.
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