This is one of the most difficult times of my life, and when you loose your home, on top of everything, it makes you feel humiliated too. Never once did I feel the staff didn’t treat me with the same respect they would of treated me if I was buying a home. Thank you again so very much, and when I buy another home, I will contact the Aladin group again. Thank You!
~The Crawford Family
Aladin
Aug 062010
Aug 042010
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Send all entries to The Aladin Group, Realty Executives, 11211 N. Tatum Blvd. Ste 130, Phoenix, AZ 85028 OR Danielle@TheAladinGroup.com with child’s name and age.
By now, most Realtors are aware of many of the risks associated with short sales. Either they know someone that has faced litigation or have read about problems that can arise from homeowners that either faced an unexpected foreclosure or who did not understand their deficiency or tax liability.
Recently we have seen a new issue arise for some homeowners that completed a short sale before filing for bankruptcy. The issue of concern is that a homeowner may no longer qualify for bankruptcy because the sale of their home lowered their debt ratio and, thus they became ineligible under the means test 11 U.S. C. 707. The means test compares the income against the expenses or debts of a homeowner and determines whether a homeowner is eligible to seek relief to discharge debt obligations under a Chapter 7 bankruptcy proceeding.
Residential mortgage debts are an expense which can be included in the means test. By including the residential mortgage debt in the analysis, the probability that a homeowner can qualify for bankruptcy is increased. By excluding or eliminating that debt, the probability of the homeowner to qualify for bankruptcy is decreased or, in some instances, eliminated altogether. So, if a homeowner intends to file for bankruptcy, a review of the homeowners eligibility under the means test should be completed by a qualified bankruptcy attorney before a homeowner is encouraged to complete a short sale.
Another concern arises when a homeowner completes a short sale and then files for bankruptcy some years later. Since the lender has up to six years after the close of escrow to file a deficiency lawsuit, it is possible that the lawsuit could come after the homeowner has been discharged from bankruptcy. A bankruptcy attorney may not include the mortgage loan(s) that was involved with a completed short sale if a 1099 has been filed by the lender or if the homeowner fails to tell the attorney of the loans. However, since the legal effect of a 1099 filing upon a homeowner’s deficiency liability is still in dispute under Arizona law, it is recommended that all loans from previously completed short sale transactions be included when filing bankruptcy, even if the short sale was completed several years prior (at least until the 1099 issue has been clearly settled by the courts).
Short sales are on the increase which means that it is a market segment that Realtors cannot ignore. We hope this information helps you to avoid the pitfalls and makes you better prepared to handle these issues.
Jul 162010
Sorry we missed last week! We’ve been super busy here at The Aladin Group! Here is your Friday funny for this week:
Have an awesome weekend! Call The Aladin Group to buy or sell a home TODAY!
Jul 132010
Housing-related loan delinquencies improved across the board in the first quarter of 2010, the American Bankers Association (ABA) recently reported.
According to ABA’s first quarter Consumer Credit Delinquency Bulletin, home equity delinquencies fell for the first time in two years to 4.12 percent of all accounts, down from 4.32 percent the previous quarter. During the same period, home equity lines of credit delinquencies fell to 1.81 percent from 2.04 percent, and property improvement loan delinquencies fell to 1.4 from 1.63 percent.
James Chessen, ABA chief economist, said the sweeping improvements in housing-related loan delinquencies indicate stability is returning to the housing market. “This is the first inkling that stability is taking hold in the housing market, but the pace of recovery will still be long and drawn out,” he noted.
In addition to the decline in housing-related loan delinquencies, consumer loan delinquencies as a whole showed broad-based improvement for the third quarter in a row. ABA’s report found that the composite ratio, which tracked delinquencies in eight closed-end installment loan categories, fell to 2.98 percent of all accounts during the first quarter, down from 3.19 percent the previous quarter.
Bank card delinquencies fell to 3.88 percent from 4.39 percent, marking the first time since the second quarter of 2002 that bank card delinquencies have fallen below 4 percent. In addition, direct auto loan delinquencies fell from 1.94 percent to 1.79 percent, and personal loan delinquencies fell from 3.63 percent to 3.61 percent.
Chsess said the improvements reflect concerted efforts be consumers to “shore up” their finances. He said consumer balance sheets are clearly improving as people are borrowing less, saving more, and building wealth.
“The overall risk in banks’ consumer loan portfolios is improving and will continue to do so,” Chessen said. “Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high. Regulators are also demanding that banks remain cautious. With job growth creeping back slowly and personal incomes rising a bit, I’m hopeful that improvements in consumer delinquencies will continue.”
DSnews.com
Jun 292010
Fannie Mae says it will get tough on borrowers who engage in “strategic defaults,” or walk away from a home that’s worth less than what’s owed on the mortgage even if they can afford to keep making their payments.
Economist Mark Zandi of Moody’s Analytics has estimated that 9 million homeowners are “underwater” by more than 20 percent, making them more likely to consider a strategic default.
Fannie Mae said Wednesday that it will not only refuse to guarantee another loan for seven years if it has evidence that a borrower chose to default on their loan, and will seek to recoup losses in court through deficiency judgements in states that allow lenders such recourse.
There’s a carrot-and-stick aspect to the new policy. Troubled borrowers who work with their servicer on foreclosure alternatives such as loan modifications, short sales, or deeds in lieu of foreclosure can be eligible for a new loan in two to three years if they can show extenuating circumstances such as job loss, illness or divorce.
“Walking away from a mortgage is bad for borrowers and bad for communities, and our approach is meant to deter the disturbing trend toward strategic defaulting,” said Terence Edwards, Fannie Mae’s executive vice president for credit portfolio management, in a press release (http://www.fanniemae.com/newsreleases/2010/5071.jhtml).
“On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time.”
Under policy changes announced in April, borrowers may be eligible for a loan guaranteed by Fannie Mae within two years of a short sale or deed in lieu of foreclosure.
Those who can demonstrate extenuating circumstances such as a job loss will be required to make down payments of at least 10 percent, and those who cannot must make 20 percent down payments.
Fannie Mae usually requires five years for borrowers who have been foreclosed on to reestablish credit, but those who can demonstrate extenuating circumstances may qualify in as soon as three years.
Next month, Fannie Mae says it will instruct its servicers to begin monitoring delinquent loans facing foreclosure and issuing recommendations for cases that warrant the pursuit of deficiency judgments.
While Fannie Mae won’t be able to obtain deficiency judgements against borrowers who default on their first loans in “non-recourse” lending states, in some of those states it might have recourse to seek deficiency judgements on refinance and home-equity loans.
In the 1930s, many states including California passed laws that barred lenders from suing homeowners who defaulted on their mortgages for losses above and beyond what lenders were able to recover when foreclosing on and reselling the borrower’s home.
California lawmakers are considering a bill that would extend some protection from deficiency judgments for borrowers who refinanced their mortgages.
By Inman News, Thursday, June 24, 2010.
http://www.inman.com/news/2010/06/24/fannie-cracking-down-walkaways
Jun 252010
Call The Aladin Group if you’d like to see a house this weekend!
Analysis by Altos Research shows that home prices in most major U.S. cities have broken free of the downward spiral. The company’s 10-city composite index was up 0.2 percent in May – the first monthly increase recorded by Altos in nine months.
Another positive, Altos says readings of weekly price changes have continued to show modest seasonal increases for the past seven weeks, indicating that traditional home price metrics will soon show increases as well.
Altos’ 10-city composite is based on prices of single family homes in Boston, Chicago, New York, Los Angeles, San Diego, San Francisco, Miami, Las Vegas, Washington D.C, and Denver. But the company analyzes pricing trends across a larger pool of 26 major markets.
Asking prices last month rose in 18 of those 26 markets, Altos reports. San Francisco experienced the sharpest increase, with prices rising 2.4 percent, followed by Dallas and Washington, D.C. with increases of 1.4 percent and 1.2 percent respectively. The Washington, D.C. market also saw the largest jump over the most recent three-month period, with an increase of 6.2 percent.
The largest single-month and three-month declines occurred in Miami with prices falling 1.7 percent during May and 4.4 percent during the past three months. Prices were also down last month in Phoenix, Los Angeles, Detroit, Las Vegas, New York, Salt Lake City, and San Diego.
During May, the inventory of properties listed for sale rose by 2.6 percent across Altos’ 10-city composite markets. The increase was more pronounced over the past three months, which produced a 12.4 percent rise in inventory.
For-sale property counts increased in 22 of the 26 markets studied and declined in just four: Detroit, Miami, Dallas, and Minneapolis.
Altos says nationally, inventory is 10 percent lower than this time in 2009, but has been growing rapidly through the spring months. The housing supply increased at the fastest rate in Boston and San Francisco, up 5.9 percent and 5.5 percent respectively during May.
Inventory fell most sharply in the weak Detroit market, with listed properties dropping 3.7 percent in May.
The company notes in its report that market dynamics have been heavily influenced by the Federal Reserve’s mortgage-backed securities (MBS) purchase program which kept mortgage rates historically low and by the federal government’s home buyer tax credit.
The Federal Reserve program officially ended on March 31 and the tax credit will only apply to homes purchased through the end of April.
“The big question is the extent to which these programs may have pulled forward housing demand and how sharply demand could fall off with their expiration,” Altos said.
http://www.dsnews.com/articles/altos-index-shows-rise-home-prices-first-in-nine-months-2010-06-18
WASHINGTON – Homebuyers may get an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.
A new Arizona State University real-estate report shows home foreclosures may be leveling off, but the author says it’s unclear if the trend will continue because of the number of defaults and late payments still plaguing the market.
Foreclosures were 33 percent of the market’s recorded activity in May, down from 40 percent in March, according to the latest realty-studies report.
The question remains whether the drop is a simply a blip, said Jay Butler, an associate professor of real estate who authors the study.
“We’re sort of at a break point,” Butler said. “Are we now going to see foreclosures decline, or is it simply for other reasons this is just a respite and we’re going to see an increase? Because we’ve not been here before, it’s hard to say which fork in the road we’re going to take.”
A number of issues will continue to affect the real-estate market, he said. Defaults and late payments remain at record levels, and they could be a precursor to additional foreclosures. Income may not increase enough for people to hold on to their current homes, especially if they are confronted with a change in an adjustable-rate mortgage that could reset in coming months, Butler said.
And he worries that this time of year may cause many people with high debt to walk away from homes with declining neighborhood values.
“A lot of people are looking at the end of school for their kids as a key point,” Butler said. “If they had gotten foreclosed on a few months ago, they would have had to leave and take the kids to another school. Now, they can easily move the kids, maybe without losing face or explaining everything, and move to another area.”
Arizona’s pending immigration law may also hurt the market, Butler said.
Still, there are some bright spots.
The number of new foreclosure filings against Phoenix-area homeowners fell in May to the lowest level since July 2008, according to the Information Market. Foreclosures also dropped last month to 4,090, their lowest since November 2009, the report said.
Butler’s research shows that, as a total, foreclosures added together with the sales of previously foreclosed-on properties still represented 60 percent of the recorded activity in the Valley housing market in May.
For the past year, about 42 percent of the traditional sales were foreclosure homes sold again with a median markdown of 15 percent from the foreclosure price, he said.
More than 3,200 single-family homes in the Valley were foreclosed on during May of this year. That’s down from almost 3,500 foreclosures in April but up from slightly more than 3,000 in May of last year.
The market is less busy but higher-priced this spring than last spring, the report shows. The number of homes resold was more than 6,400 in May. That’s down from almost 6,800 in April and almost 7,000 the previous May. The median single-family home price for resold homes $144,000 in both April and May, significantly up from $130,000 May 2009.
http://www.azcentral.com/arizonarepublic/business/articles/2010/06/10/20100610biz-resales0610.html