Entries from July 2008 ↓

This is the third installment in my Tucson Short Sales series, I would suggest reading part one (Tucson Short Sales - Part 1 - What are Short Sales?) and part 2 (Tucson Short Sales - Part 2 - I’m Ready to Short Sale My Home.. What Are The Repercussions?) before reading this article.

Since I wrote the first two articles in this series the Senate and House passed a Housing Rescue Plan that President Bush is expecting to enact. In short the bill will allow many homeowners who are in financial distress and who purchased a home between January 2005 and June 2007 to essentially refinance their home to 90% of the market value of their home. Read the article about the Housing Rescue Plan here.

We will continue with the assumption that you (the homeowner) has decided to proceed with the short sale process. Because the process is generally complicated with many timelines and necessary documentation, several Consumer Resource Groups have sprung up to assist homeowner’s. If you are considering a short sale consider calling one of the below agencies to help you.

Once you’ve resolved to go ahead with a short sale the process is relatively simple. You market the home as you normally would in a home sale, have showings, entertain offers, etc. Once you have an accepted offer, it is then submitted to the bank along with whatever documentation the lender requires; together this is generally called a “short sale package”.

Once a completed “file” is submitted the bank will then assign the file to a “negotiator” or “intermediary”. These processors generally have many files on their desk at one time and much of the timeline is eaten up here. For the next step in the Short Sale process stayed tuned!

• Tucson Short Sales - Part 1 - What are Short Sales?
• Tucson Short Sales - Part 2 - I’m Ready to Short Sale My Home.. What Are The Repercussions?
• Tucson Short Sales - Part 3 - How to Short Sale My Home
• Tucson Short Sales - Part 4 - The Offer Is In To The Bank
• Tucson Short Sales - Part 5 - End Game Short Sales

If you would like to search the Tucson MLS for Short Sale, Bank-Owned, or Foreclosure homes, search my Tucson MLS or contact me for a comprehensive list.

If you would like assistance in avoiding foreclosure feel free to contact me for a no-cost consultation.

I knew that sooner or later the First Magnus debacle was caused not only by questionable lending pratices but also on other, less obvious, means.  After nearly a year since their collapse we find out that First Magnus violated Real Estate Settlement Procedures Act (RESPA) by paying mortgage brokers incentives to assist them with originating FHA loans.

For those of you who aren’t part of the real estate industry, what they did was blatantly ILLEGAL!

The Arizona Daily Star just published this article regarding First Magnus and they will be publishing an expanded article in tomorrow’s paper. A quick excerpt:

HUD found that First Magnus paid $58,571 in incentives from Jan. 1, 2003 to Dec. 31, 2005 to seven brokers for the origination of 169 FHA-insured mortgages totaling more than $24 million, according to the report.

Tomorrow’s edition should detail these illegal activites and hopefully pinpoint these crooked mortgage brokers. And all this while First Magnus has re-opened shop as Stonewater Mortgage Corp.

Kind of makes you sick, doesn’t it?

This morning I went back through our MLS data and charted how many sales there have been for short sale and lender owned homes for the past few years. I was curious to see what the trends looked like and if they matched up what I’ve been seeing lately, and for the most part my assumptions were true. Below are the numbers:

Keep in mind these results are from the Tucson MLS and because I searched on the keywords “short sale” and “lender” we may have a few extraneous results. I’ve been in touch with the MLS staff concerning the lack of Tucson MLS designations for short sale and bank-owned homes and apparently they are working on a solution.

What we see are several trends dating back to 1999. There was a mild rise in short sales/bank-owned homes in 2002 which fell off during the housing boom, and then in 2005 there weren’t any short sale records in Tucson.. not surprising considering the inflated market.

In 2006, however, we see almost a 300% increase in bank-owned homes with only two short sales. This can be attributed to a couple things:

1. Housing market was starting to trend downward
2. A lot of people who refinanced and/or took out HELOCs in 2005 with the thought of selling in the near future were suddenly faced with a mortgage higher than their home’s value
3. Short sales were still fairly uncommon to real estate agents and homeowners

In 2007 as real estate agents became more educated on short sales and received the proper training closed short sales went up. So far this year, in only seven months, we are already at 132 closed short sales which is a dramatic increase from just last year.  Lender owned homes have also mushroomed to 297 closed deals this year and will likely surpass 450 sales before the year is over.

So what will the next year or so look like for short sales and bank-owned homes? Personally I think we will probably spike at the end of this year, perhaps next spring, and hold fairly steady for a bit while banks unload their excess inventory and agents continue to be successful in short sales.

If the “Housing and Economic Recovery Act of 2008” being proposed by Senators Chris Dodd (D-CT) and Richard Shelby (R-AL) actually is passed I think this number may go up in the short term; in my opinion the bill, while well intentioned, is fraught with potholes and danger signs that can’t be ignored and it practically enourages homeowners to go into default on their mortgage. Read the .pdf linked above and see if you come to the same conclusion!