azpropertypro blog

Came across an article in the Arizona Republic today about how most people will receive a tax cut on their property taxes. That’s the least they could do for homeowner/taxpayers since the property values have decreased over 60 percent since 2006. Please be sure and read further into the article and into the comments about how each school district will raise the tax rate to compensate for missed income. Are you kidding? I wish the AZ government had its act together for once.

Here’s the link if you’d like to read it. I also suggest reading the comments. If you’re a teacher, some of the comments will most likely strike a nerve or two.

ARTICLE LINK

How to buy a house after defaulting on the last mortgage. This is a question more and more people will be asking in the next few years. I don’t agree with the government’s stance that “defaulters shouldn’t have owned a house in the first place and maybe they shouldn’t be home owners now”. Look. I’m not saying that home buyers in 2005-2008 were not responsible for their decisions. However in areas like Phoenix, not only were homes easy to finance, but were at a all-time high in price. We don’t have that now. Mortgage rates are not only at all-time lows, but home prices are comparable to that of the nineties. Let’s loosen up the financing again! It’s true that those who defaulted did it because they couldn’t afford the monthly mortgage rate. Now they can! In many ways, rent is becoming less affordable than home ownership. THE BIG PICTURE: Home owners that defaulted NEED another chance. Not only will it move inventory, it will help our housing market tremendously. “2011 Another Chance Bill”! Doesn’t that make sense?

Your debt-to-income ratio can be a valuable number — some say as important as your credit score. It’s exactly what it sounds: the amount of debt you have as compared to your overall income.

Lenders look at this ratio when they are trying to decide whether to lend you money or extend credit. A low DTI shows you have a good balance between debt and income. As you might guess, lenders like this number to be low — generally you’ll want to keep it below 36, but the lower it is, the greater the chance you will be able to get the loans or credit you seek.

Add up all of your monthly debt obligations — often called recurring debt — including your mortgage (principal, interest, taxes and insurance) and home equity loan payments, car loans, student loans, your minimum monthly payments on any credit card debt, and any other loans that you might have.
Do not include such expenses as groceries, entertainment, utilities and gasoline. The resulting number is also often called your back-end ratio.

This ratio tells a lot about your financial well-being. For more information, contact Troy Elston at West USA Realty at 602.740.1035.

Ever tried to buy a bank-owned home lately? It’s becoming less of a pleasant experience each day. Many buyers enter the foreclosure market disillusioned because what they find is absolute risk. Here’s how it works. The homebuyer hires a real estate agent who presents an AAR offer to the listing agent hired to sell the bank-owned property. Before the offer even gets submitted, the description on the MLS property listing demands that the buyer submits an “AS-IS” offer and completes dozens of pre-qualifying questions. The buyer can’t even select his or her own title company anymore. If you’ve made it past this point, you’ll love what comes next. REO agents make it very clear that the bank “will not perform ANY repairs”. Although they simply say that’s not true, it’s a very difficult endeavor to say the least. One way to approach this as a buyer is to bring your inspector or contractor in at the beginning – before you write the offer. If you’re able to live with the numerous issues found in the foreclosure property your looking at, simply adjust this into your offer price. Yes, it’s true – you will most likely have an inspection period, but you signed the as-is addendum, remember? Negotiating with asset managers after the inspection period won’t go so well. There are occasions where the buyer has leverage because of the type of financing they use, but that usually covers a list of items that MUST be present and working as per the FHA inspection.

As I work more and more with Freddy Mac and Fannie Mae, it’s becoming clear that buyers and their agents are taking on too much risk. Talk to any Real Estate Attorney and he’ll tell you that nothing in the 18-page REO Addendum is in your favor. Does your agent go over the addendums with you or are they just looking to get the house under contract and deal with it later? Does your agent even explain the bank’s addendum to you? They should. It’s common knowledge that an addendum will override any previous written and verbal agreements made in the original offer. Read these addendums closely. Yes, you! Your agent isn’t trained to work with REO forms in school. Your agent was trained to use the Arizona Association of Realtors forms. Many addendums protect only the Seller and limit their liability in case of any future misunderstandings. Most importantly, they change the terms of the original offer. Always seek legal guidance before assuming the REO addendum is harmless.

Many addendums from Fannie Mae and other lenders/servicers/investors and so on disregard the original terms of the offer completely. There needs to be some kind of regulation to these practices. Bank-owned properties are far from precious, they have lots of problems. Many of these problems are rarely addressed and if they are, it’s not out of kindness. Buyers need to understand what they’re getting themselves into when they buy a foreclosed home. Whether it’s a home that’s been vacant for the last 30 months or a home with serious material latent defects, writing the offer price that takes future repairs into account ultimately determines whether we have a sale or not.

As an agent, I want my homebuyers to live in a home they love with as little risk as possible, but my buyers have to understand that the rules to buying are constantly being changed by the lenders – and often for the worst. If you’d like to discuss buying a foreclosed or bank-owned property further, please feel free to contact me via email at troy.elston@cox.net or call Troy Elston at 602-740-1035.

Troy Elston, West USA Realty is a licensed Realtor in Arizona and a member of the Phoenix Association of Realtors, Arizona Association of Realtors and the National Association of Realtors.

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Fees paid by renter: Credit App:$45; Security Deposit:$1000; Cleaning Deposit: $250;

To all of you, I wish you the best Christmas ever!

Introducing my Phoenix Winter Promotion. When you use Troy Elston to find your next Rental Home, you’ll receive a Black Angus $30 Gift Card upon a successful lease signing and move in. Please visit http://www.azpropertynews.com/rentgetasteak.jpg for more details or contact Troy at 602.740.1035 today!

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and
bring back private lending 

* The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative 
authority to increase the maximum annual MIP that the FHA can charge. 

* If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP. 

* This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing 
The initial up-front increase is included in a Mortgagee Letter to be released January 21st, and will go into effect in the spring.

2. Update the combination of FICO scores and down payments for new borrowers. 

* New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. (Most lenders allow a minimum of 620 FICO score)

* This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well. 

* This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

3. Reduce allowable seller concessions from 6% to 3% 

* The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions. 

* This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

4. Increase enforcement on FHA lenders 

* Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1. 
This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available. 

* Enhance monitoring of lender performance and compliance with FHA guidelines and standards. 

* Implement Credit Watch termination through lender underwriting ID in addition to originating ID. 
This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately. 
Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process 
Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer. 

* HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes: 

* Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite 

* Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches.

Came across this graphic the other day. It reminds be of an outbreak map for some new virus. In fact, it sort of is. The infection is foreclosures. The cure. Jobs!

10.16.2009
The total Short Sale properties listed on the ARMLS available for sale was 7764.

10.19.2009
The total Short Sale properties listed on the ARMLS available for sale was 7905.

10.20.2009
The total Short Sale properties listed on the ARMLS available for sale was 8006.

10.21.2009
The total Short Sale properties listed on the ARMLS available for sale was 8099.

10.22.2009
The total Short Sale properties listed on the ARMLS available for sale was 8200.

10.23.2009
The total Short Sale properties listed on the ARMLS available for sale was 8269.