Phoenix area mortgage defaults rising, Arizona Republic reports

I saw an interesting article by Catherine Reagor of the Arizona Republic the other day, which began "The number of people losing their homes to foreclosure or falling behind on their mortgages in metropolitan Phoenix is near a two-year high, the latest and most tragic sign of the Valley's housing market slowdown." The article goes on to say that when the Phoenix market slowdown started in early Spring of 2006, sales started slowing and listings of homes for sales spiked. (I know from Arizona MLS data that we have about an 8-month supply of houses on MLS. There are around 45,000 for sale and only 6,000 or so selling per month. This makes it very difficult to sell fast if you owe more than you can net at sale or is your foreclosure auction date would occur long before you could get your house under contract and closed.)

The article continues that foreclosures are not only occurring in the West Valley, where they've been traditionally common, "but also in pricey neighborhoods in the East Valley, where credit-card debt levels are higher than average."Folks in this situation used to be able to sell quickly or refinance into a new mortgage to get cash out of their houses, but now if they've fallen behind on their mortgage they often can't qualify for a refinance. Even if they can, the payments are often higher because now the value of their house has actually dropped or their credit scores are lower, leading to higher interest rates.

All signs point to even higher rates of foreclosure in 2007 and 2008. Our company can help families in this situation, even if it looks hopeless. Please call our free educational message at 1-800-433-8563 extension 86186, and leave your name, address and phone number. If you do, we'll send your our free Consumer's Guide to the Foreclosure Process. It contains a wealth of information you simply must have if you are facing this situation. Then we can get with you to see how we can work together to put this difficult situation behind you once and for all!

USA Today says Foreclosures Up as Borrowers Fall Behind

Another sign of our times is an article in the December 14, 2006 USA Today, by Patrick O'Driscoll and Noelle Knox entitled "More homes are going, going, gone". This article talks about Foreclosure Auctions and how they operate. The article states that "About 4.7% of homeonwers were late on their mortgage payments in July through September this year, up slightly from 4.4% in the third quarter last year, the Mortgage Bankers Association said Wednesday."

The article mentions that many borrowers get into houses with adjustable rate subprime loans, which are high interest mortgages for people whose credit is impaired in some way. The initial low interest rate is usually locked for a year or two, and then when the rate starts adjusting upwards, it pushes the monthly payment beyond what the borrower can afford. The article quoted a Denver real estate broker who actually saw a billboard in California that said "Own the home you want, not the one you can afford" - which was touting an ARM product to get people into a house they might be able to afford now, but not when the ARM interest rate starts going up. That's a foreclosure just waiting to happen unless the family can refinance out of it, but if they can't afford the payment on a fixed rate mortgage covering that house, or if they've started missing payments on the ARM, they can find themselves in foreclosure!

The article gave the top reasons for families winding up in foreclosure: "The loss of a job is the No. 1 reason people go into foreclsure, followed by health problems and a death in the family. Typically, a lender will start foreclosure proceedings after a borrower misses payments for three months in a row. The homeowner can try to sell the property first. But that can be hard in areas where home sales are falling." (That last sentence describes the Phoenix area market at this time.)

Our company can help families in this situation, even if it looks hopeless. As you can see, you are not alone. Bad things do happen to good people. We can help! Please call our free educational message at 1-800-433-8563 extension 86186, and leave your name, address and phone number. If you do, we'll send you our free Consumer's Guide to the Foreclosure Process. It contains a wealth of information you simply must have if you are facing this situation. Then we can get with you to see how we can work together to put this difficult situation behind you once and for all!