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When a house goes into foreclosure, the mortgage company will turn around and sell the home in hopes of recoverng any money owed to them by the home owner. This includes the previous mortgage amount, late payments, lawyers fees, and administrative costs incurred during the foreclosure process. Sometimes a lender can only sell the property at a fraction of the cost. In that case, the lender loses money on the transaction. While in some states, the lender may be entitled to receive the deficiency judgment in court and come after the ex-home owner for the remaining balance owed (ie: the lender can sue the ex-home owner for the amount they lost on the transaction), in Arizona, however, there are limitations to a deficiency incurred during foreclosure. Arizona's "anti-deficiency" statutes prevent a lender from suing a person for any losses on a home after foreclosure. As outlined in Arizona Revised Statutes, Title 33, Chapter 6.1, a person may not be sued by his or her lender if the property is located on 2.5 acres or less and is a single family residence or duplex. This only applies if the decrease in value is not due to the home owner's neglect. If a lender seeks a deficiency judgment, they have 90 days after the sale of the property to begin judicial proceedings to recover any losses. Failure to do so may result in the lender's loss of its right to recover the deficiency. However if a home owner fears that he or she does not qualify for this exception, a deficiency judgment may be avoided by deeding the property back to the lender prior to foreclosure. This is known as a deed-in-lieu of foreclosure. By accepting the deed, the lender is agreeing to accept the property for the amount that the person owes, thus eliminating any potential deficiency. Still, Should a person deed the property back to the lender, he or she may be taxed on the amount of the deficiency that was forgiven by the lender. In other words, if the mortgage company lost 20,000 on a $100,000 home and deeds the home to the lender, the lender will forgive the $100,000 loan and accept the $80,000 as payment in full. However, the ex-home owner may now have to report the $20,000 as taxable income on his or her next tax return. The only exception to Arizona's anti-deficiency statutes are VA loans. As decided by recent litigation, VA is allowed to obtain a deficiency judgment despite current state laws that prohibit such actions. If a homeowner is involved in a mortgage or a deed trust and causes a reduction in the value of the property (damage done to the property or not taking care of it) they are usually protected by this law. However commercial properties and vacant land are not protected. VA and FHA also have special considerations due to federal law and may also not be covered.
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2009 FHA Loan Limits 2009 FHA loan limits. The 2009 FHA loan limit is $271,050 for all counties in AZ, excluding Coconino. The limit in Coconino is $333,500. This includes popular areas such as Maricopa and Pinal counties. Fannie Mae and Freddie Mac 2009 Loan Limits
Both Fannie Mae and Freddie Mac have the same loan limits for 2009. With the exception of Coconino, all counties in AZ will remain at $417,000. The Coconino limit will be $450,000. In high cost areas like San Diego and Orange County it will be $625,500.
Freddie Mac has announced the following changes to become effective for all loans after February 2, 2009. (Lenders may however implement the changes in advance)
Freddie Mac will no longer purchase loans with stated income/stated assets. This eliminates Accept Plus findings in LP. The maximum DTI will be at 45%. For more information, please contact Ann Adams and Associates at 480-777-3414.
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With so many loan options out there, It can be difficult to know which one to choose. Understanding the different types of loans and where your credit rating falls is the first step. Here are some examples of the most popular types of loans available today:
Zero Down Loans Coming up with the necessary down payment for a home loan can be a big hurdle for many would-be home buyers. Fortunately, there are options available including loans that require no money down. These loans generally carry a higher interest rate, but even so, these loans can be very affordable when you factor in today's overall rates.
No Income Verification Loans For self-employed buyers and others who have a difficult time documenting income history, this loan may be for you. Programs exist for up to 90% financing. These loans carry a slightly higher interest rate, but generally speaking, the more information you can document, the lower the interest rate. There are certain liquidity requirements typically associated with this type of program. Even so, it is one of the easiest programs for many buyers today! FHA and VA Loans The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low downpayments, which typically run around 3 percent, and have relatively easy requirements. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program! In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!
Adjustable Rate Loans With a fixed-rate mortgage, the interest rate stays the same for the life of the loan. But with an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.
If you are still unsure which option to take, please call our office at 480-777-3414 and we'll be happy to help you find the loan that is best for you.
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Having Credit Issues and Considering a Short Sale? We can help. While it can seem daunting, it’s not always as bad as it seems. We have lots of experience with short sales, a great track record of saving homeowners from foreclosure, and are very familiar with the process and the best ways to help you. Here are some of the things that we can do to help. For instance, we may be able to negotiate with the bank to report to the credit institutions in a way that will do less damage your credit. This can be done in the negotiation process. If we can get them to agree to report your loss as unrated, we may have a chance of saving your credit score sooner. We work very hard to prevent foreclosure and minimize any damage whenever possible. No one can guarantee 100% success in this area. We’ve also found that one lien holder is easier to negotiate than two. It is much more difficult to work with two different lenders on Short Sales because many of the 2nd lien holders put up a fight and ask for more from the seller. In this case, we usually advise the sellers to look into bankruptcy or simply threaten this to the bank. The 2nd lien holder gets nothing when this happens. It’s also good to note that taxes on primary residence short sales are forgiven; although, we have been told that if it is your primary residence, you will still get a 1099 that you do not pay on. It is a requirement of ours that our sellers work with us to get their homes in decent condition as quickly as possible and also get us any information we need so we can get the short sale process moving quickly. We cannot stress how important this is. While most people work well with us, we will and have refused business from sellers that do not get us what we need fast enough. We simply cannot help people that do not give us the information we need in a timely matter. It needs to be a team effort in order to work. The quicker we can get things moving the better chance there is to prevent foreclosure. We can make a cash offer to the bank in most cases in about 72 hours or less. Each individual situation in a short sale is different and we can help decide what your best route may be. We will do our best to ease any stress and hopefully avoid a foreclosure. Call us at 402-777-3414 if you have questions regarding short sales or would like us to take a look at your home. We’ll be happy to discuss your best options with you.
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Great news for sellers and buyers alike! Despite the recent downturn in the economy, house prices are finally becoming more affordable. According to a recent article by Brian Woolsey in Forbes.com some cities are still struggling with high prices and slow markets. Despite this, the Arizona housing market in Maricopa County is becoming more and more affordable. Mr. Woolsey states that the price drop can be seen in most areas of Maricopa county but is most significant in the exurbs of Phoenix. The price drop is most noticable in the median price range of homes for sale. Anthony Sanders, a professor at Arizona State University in Tempe, states that "the decline in prices, particularly in typical entry-level neighborhoods, is generating an affordable climate for first time home buyers." He also goes on the say that "the downside is that affordable housing is typically on the rural fringe and is much less desired now that gas prices have rocketed." The article goes on to say that low housing prices should eventually spread to the more urban areas of Maricopa County like Phoenix, Tempe and Scottsdale but for now still mainly stays to the exurbs. This is great news for everyone-espcially first time home buyers. Buyers can get a good price for their home and sellers should see more people coming through their homes and subsequently their home has a better chance of selling.
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• 2,425 sq. ft., 2 bath, 4 bdrm single story
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MLS®
$459,000
- Reduced Price!
K-C Ranch Estates, Gilbert
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BEAUTIFUL HORSE PROPERTY IN A PRIME GILBERT LOCATION. NO HOA. REDUCED PRICE! MOTIVATED SELLER! Nice home on nearly an acre lot. Quiet neighborhood street. Mature shade trees in front, beautiful tile & newer laminate wood flooring throughout home. Kitchen has all new stainless steel appliances. Spacious family room w/cozy fireplace. Kitchen window overlooks your huge back lot which includes a spacious covered patio & nice above-ground pool. Horse amenities include 3 stalls (2 covered & lighted w/auto watering) + roundpen. RV gate & parking. Walking dist to schools! New roof in 2005. Flood irrigation only $90/yr. Horse trailer & lighted batting cage included if desired!
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• 1,248 sq. ft., 2 bath, 3 bdrm single story
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MLS®
$109,000
Desert Vista Place, Peoria
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AFFORDABLE STARTER HOME IN QUIET PEORIA LOCATION. HOME IS PRICED FOR QUICK SALE. FRESHLY PAINTED. OWNER'S ARE GIVING BUYER $2500 TO USE FOR DOWN PAYMENT/CLOSING COSTS/FLOORING. GREAT VALUE FOR THIS 3 BEDROOM HOME.
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Best Unit in the Building!
• 1 bath, 1 bdrm single story
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MLS®
$130,000
Biltmore Square, Phoenix
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Best Unit in Biltmore Square! Black granite countertops in the kitchen and all white modern cabinetry and appliances. Kitchen has a breakast bar and hardwood floors. Upgraded tile in the bathroom and separate laundry room with washer/dryer. Living room has an open floor plan, beautiful hardwood floors and a gas fireplace. Living room opens to a spacious master bedroom with french doors,a walk-in closet and patio. Gated community. All the amenities you want: 3 swimming pools, spa, fitness ctr, conference ctr, coffee/piano bar. Near HWY 51 & downtown. Rents go to around $900 to $1000.(Short Sale Completion pending COE takes 45 to 60 days after accepted)
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Great Mesa Condo!
• 2 bdrm single story
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MLS®
$90,000
Woodglen Square, Mesa
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Great condo in Mesa. Complex features 2 heated pools/spas and well manicured grounds. Short Sale
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Come and See Remodeled Phoenix Home!
• 1,100 sq. ft., 2 bath, 2 bdrm single story
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MLS®
$95,625
Maryvale Terrace, Phoenix
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SHORT SALE. Completely remodeled. Beautiful Oak cabinets in the Kitchen with granite slab counters. Tile in the proper places. Bring all your toys, enjoy the RV GATE. Large patio, shed. Cozy, cute.
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Great Home For Price!!
• 1,534 sq. ft., 2 bath, 4 bdrm single story
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MLS®
$125,000
Rancho El Mirage, El Mirage
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Great opportunity for a first time buyer or an investor to own a nice home for a minimun price. Sedona Model with split master floor plan. Beautiful 20' ceramic tile in the living areas. Vaulted ceilings. Near Surprise Sports Center, lots of shopping areas, Schools, restaurants and more. Although this home is sold As-Is condition, it is move-in ready.
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Great Mountain Views!
• 1,902 sq. ft., 2 bath, 3 bdrm 2 story
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MLS®
$125,000
Sundance, Buckeye
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Two Blocks from Golf Course, Great mountian views. Child play area one block from home. Shopping center very close. Extended garage. Large covered patio with lights. Beautifull new comunity. Large loft area.
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Great Value! Oversized Lot!
• 1,750 sq. ft., 2 bath, 3 bdrm single story
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MLS®
$135,000
Maryvale Terrace, Phoenix
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Short Sale. Tired of HOAs? bring all your toys, enjoy the over size lot, the RV Gate. This home features 3 bed, 2 bath, large room addition with fireplace and a remodeled kitchen. Ceiling fans T/O, blinds T/O Tile in the living area. Short distance to schools. Close to the I-10 and the 101. Sold 'As Is'
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Beautiful Home,Low Price!
• 1,744 sq. ft., 2 bath, 4 bdrm single story
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MLS®
$155,000
Country Place, Tolleson
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First time buyers, don't miss the opportunity to own a beautiful home for such a low price! Sold AS-IS condition Must use Empire Title Sherry Johnson 602 678 5000. Please include As-Is addendum.
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