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#3 state in the U.S. for February foreclosures: Arizona

Arizona

Sign of the times in sunny Arizona (AP Photo/Ross D. Franklin)

[Source: Maurna Desmond, Forbes] — Rising unemployment is delivering another blow to the depressed U.S. housing market.  After months of declines in the number of foreclosures despite rising mortgage defaults, with a barricade of state and lender moratoriums preventing repossessions, foreclosures rose 6% in February from the month before, with 209,631 filings in all, according to Irvine, Calif.-based data firm RealtyTrac.  Compared to the corresponding month a year ago, foreclosures were up 30%…

Coming in at #3 is Arizona where high vacancy rates in overbuilt areas continue to plague this sunny state:

  • Pre-foreclosures and foreclosures, February 2009: 18,119
  • Rank, housing units per foreclosure: 147
  • Rank, housing units per foreclosure: No. 2
  • Rate, change from February 2008: 88%
  • Unemployment rate, January 2009: 7%
  • One-month increase (from December 2008): 0.4 points
  • One-year increase (from January 2008): 2.6

[Note: To read the full article, click here.]

USA Today examines the pain on Main Street. 1st stop: downtown Phoenix

Mike Canzona, downtown Phoenix hot dog vendor (photo: David Wallace, Arizona Republic)

[Source: USA Today] — As a national recession deepens and the federal government bails out Wall Street, Americans are increasingly concerned about the economic health of Main Street.  That phrase evokes images of family-owned businesses in small towns.  Yet, every city has a Main Street — a major boulevard of commerce in its downtown business district.  To find out how these communities are doing, USA Today visited five Main Streets in different-size cities around the country.

The first in the series, Central Avenue in Phoenix, includes “on the street” video interviews and photo montage of downtown Phoenix.

How foreclosures have swept metro Phoenix

foreclosures-metro-phoenix[Source: Arizona Republic] — More than 40,000 Valley homeowners have lost their homes to foreclosure in the past 18 months.  A combination of factors led to the surge.  Adjustable-rate mortgages have reset to higher interest rates.  Investors have walked away from bad purchases.  Job losses are mounting.

Today, the Arizona Republic offers new views of the problem plaguing the Valley’s housing market, with an analysis of these foreclosures.  Where do things go from here?  More help is coming for people struggling to hold onto their houses.  At the same time, the foreclosure boom has helped recent buyers find homes they can afford.

Viewpoint: Turns out there’s good news on Main Street

[Source: Joel Kotkin, reprinted in Arizona Republic] — As the financial crisis takes down Wall Street, the regular folks on Main Street are biting their nails, watching the toxic tsunami head their way.  But for all our nightmares of drowning in a sea of bad mortgages, foreclosed homes, and shrunken retirement plans, the truth is that the effects of this meltdown won’t be all bad in the long run.  In one regard, it could offer our society a net positive: Forced into belt-tightening, Americans are likely to strengthen our family and community ties and to center our lives more closely on the places where we live.

This trend toward what I call “the new localism” has been underway for some years, driven by changing demographics, new technologies, and rising energy prices.  But the economic downturn will probably accelerate it as individuals and corporations look not to the global stage but closer to home, concentrating and congregating on the Main Streets where we choose to live -– in the suburbs, in urban neighborhoods, or in small towns.

In his 1972 bestseller, “A Nation of Strangers,” social critic Vance Packard depicted the United States as “a society coming apart at the seams.”  He was only one in a long cavalcade of futurists who have envisioned an America of ever-increasing “spatial mobility” that would give rise to weaker families, childlessness, and anonymous communities.  Packard and others may not have been far off for their time: In 1970, nearly 20% of Americans changed their place of residence every year.  But by 2004, that figure had dropped to 14%, the lowest level since 1950.  Americans born today are actually more likely to reside near their place of birth than those who lived in the 19th century.  Part of this is due to our aging population, because older people are far less likely to move than those under 30.  But more limited economic options may intensify this phenomenon while bringing a host of social, economic, and environmental benefits in their wake.  [Note: To read the full article, click here.]

Foreclosure-riddled metro Phoenix to get $121M in federal aid

[Source: Catherine Reagor, Arizona Republic] — Metropolitan Phoenix’s ailing housing market is getting a boost from the federal government.  Early next year, Arizona will receive $121 million to combat the state’s growing foreclosure problem.  Most of the money must be spent to buy and fix up foreclosure homes and then help people purchase them. Homes in the Valley communities hardest hit by the downturn will be targeted.  Those areas include neighborhoods in Phoenix, Mesa, Avondale, Tolleson, and Surprise.  The money, distributed by the U.S. Department of Housing and Urban Affairs, comes from the nation’s Housing and Economic Recovery Act, which Congress passed in July.

The funds are earmarked for “stabilizing” the neighborhoods hurt by too many foreclosures.  The federal money will go toward the purchase of thousands of Valley foreclosure homes, which means more work for real-estate agents, appraisers, title agents and lenders.  Many people who have struggled to get financing or down-payment money to buy a house will get help.  The funds also will mean more jobs for contractors hired to fix up foreclosure homes. Homeowners in neighborhoods hurt by too many foreclosures should see their home values stabilize and even increase as the money is spent on houses nearby.

A record 35,000 homes have been foreclosed on Valley-wide so far this year.  Many neighborhoods, particularly on the Valley’s fringes, are dotted with homes left vacant and vandalized because of foreclosures.  “This money will a go a long ways to helping a lot of people and communities,” said Fred Karnas, director of the Arizona Housing Department, which will get more than $38 million of the federal money.  Only Phoenix, which has been allotted $39 million, will get more of Arizona’s share.  Several other communities will receive money, as well.  [Note: To read the full article, click here.]

Judge OKs Mortgages Ltd. deal for Tempe, but not downtown Phoenix, developer

[Source: Andrew Johnson, Arizona Republic] — A judge approved part of a settlement Tuesday between Mortgages Ltd. and a real-estate developer that had threatened to sue the bankrupt lending firm for shorting it $100 million in constructing financing.  The ruling answered a few questions about Mortgages Ltd.’s authority to negotiate deals that could affect the position of its 2,700 investors, who were the Phoenix-based company’s primary funding source.  In an oral ruling, Judge Randolph Haines granted Mortgages Ltd.’s proposal to revise terms for a loan that KML Development obtained to build a high-rise condo tower at the northwest corner of University Drive and Ash Avenue in downtown Tempe.  KML’s loan was supposed to be for $130 million.  Mortgages Ltd. has admitted to funding only $30.3 million of the amount.  Under the settlement, the outstanding principal due on that loan is reduced to $14.9 million.  That is because the difference was never funded to the borrower.  The settlement also allows for a five-year window within which development can commence.  Project plans discussed in court call for high-end student housing to be built at the site.

However, Haines rejected portions of the settlement that would have revised repayment terms for two other loans worth a combined $13.1 million that KML borrowed to buy land in downtown Phoenix.  One of those loans, worth $7 million, was to buy land in downtown Phoenix at Roosevelt and Third streets.  The other loan, for $6.1 million, was to acquire nearby land for a mixed-use project.  Allowing such a settlement would have been unfair to investors in those two loans, which Mortgages Ltd. fully funded and are now due for repayment, Haines said.

Investors fronted Mortgages Ltd. about $925 million to make loans to mostly commercial real-estate developers prior to the firm’s involuntary bankruptcy filing in June.  Their rights have been a focal point throughout the case.  Attorneys for some investors opposed the settlement.  They argued that the agreements investors signed when giving money to Mortgages Ltd. do not give them the right to change terms of a loan without investors’ consent.  Haines, however, said that even if investors withheld their consent for Mortgages Ltd. to alter deals, as some of have tried to do, that does not mean they were withholding Mortgages Ltd.’s right to continuing making decisions regarding loan terms for the other investors the company acted as an agent for.

Mortgages Ltd. is currently trying to negotiate settlements with other borrowers.  Among them are the developer of the stalled Centerpoint condo towers in downtown Tempe and the developer of the stalled Hotel Monroe project in downtown Phoenix.

Attorneys question Mortgages Ltd. settlement with downtown Phoenix developer

[Source: Andrew Johnson, Arizona Republic] — Attorneys for investors in construction lender Mortgages Ltd. expressed skepticism during a bankruptcy hearing Tuesday about a settlement the company wants to enter with a development firm that borrowed money for condominium projects.   Mortgages Ltd. attorneys say settling with KML Development is in the best interest of the nearly 500 investors who put up about $43 million for numerous loans to the borrower.

KML planned to build mixed-use condo towers in downtown Phoenix and Tempe.  The company borrowed loans from Phoenix-based Mortgages Ltd. under the names University and Ash LLC, Roosevelt Gateway LLC, and Roosevelt Gateway II LLC for development costs.  [Note: To read the full article, click here.]

Metro Phoenix housing prices dip again

[Source: J. Craig Anderson, Arizona Republic] — Lenders’ pledges to be more aggressive about modifying delinquent mortgage loans did nothing to ease Maricopa County’s swelling foreclosure rate in October, according to the latest housing report from Arizona State University.  Foreclosures on single-family homes increased from 3,655 in September to 3,745.  Meanwhile, home resales followed a predictable pattern of seasonal decreases, dipping to 4,465 transactions in October from 4,625 sales the month before.

The city with the highest ratio of foreclosures to resales was Phoenix, where there were 65 more foreclosures than regular sales.  The median resale price also fell slightly, to $175,000 in October from $180,000 in September.  The median price is down 30% from $250,000 in October 2007.

  Home Resale Median Price

Foreclosures

2007 Population Foreclosures Per Capita
Chandler           250 $241,200             1,335      246,399 0.542%
El Mirage             85 $101,925               100        26,431 0.378%
Surprise           280 $157,250               215        90,717 0.237%
Goodyear           125 $158,000               110        52,864 0.208%
Avondale           160 $142,250               160        79,798 0.201%
Peoria           195 $214,350               165      146,743 0.112%
Glendale           315 $154,650               275      253,152 0.109%
Phoenix        1,270 $121,950             1,335   1,552,259 0.086%
Mesa           440 $174,000               365      452,933 0.081%
Gilbert           290 $227,000               165      207,550 0.079%
Scottsdale           265 $441,500               155      235,677 0.066%
Tempe             75 $240,000                 35      174,091 0.020%
Sun City             40 $190,000                   5        39,000 0.013%
Maricopa Co.        4,465 $175,000             3,745   3,880,181 0.097%

Color Key: East Valley (green), West Valley (yellow), Phoenix (orange)

Foreclosure rates up 25% year-over-year; Arizona in top 3

[Source: Associated Press] — The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.  More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc.  One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.  More than 84,000 properties were repossessed in October, RealtyTrac said.

A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market.  By the end of the year, the company expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.  The collateral damage in the financial markets forced the government to pass a $700 billion financial rescue package last month.  The plan was initially to buy bad assets from banks, but Treasury Secretary Henry Paulson said Wednesday that the rescue package won’t purchase those troubled assets.  That plan would have taken too much time, he said, so instead the Treasury will rely on buying stakes in banks and encouraging them to resume more normal lending.

Also Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones.  The program was launched Oct. 1, but there are concerns that lenders won’t participate because they have to voluntarily reduce the value of a loan and take a loss.  In RealtyTrac’s report, three states — Nevada, Arizona, Florida — had the nation’s top foreclosure rates.  Nevada posted the nation’s highest rate for the 22nd consecutive month in October. [Note: To read the full article, click here.]

On Nov. 1-3, watch PHX11 to learn foreclosure prevention tips

PHX11 viewers can learn foreclosure prevention tips by watching a one-hour special, “Foreclosures: What You Need to Know,” which features a panel discussion among housing experts. Representatives from Community Housing Resources of Arizona (CHRA), Phoenix Association of Realtors, and city of Phoenix Neighborhood Services Department present options to avoid foreclosure and explain how to seek assistance from area housing counselors.  The panel also explores the advantages and disadvantages of short sales, plus the responsibilities of a homeowner who is in a foreclosure situation. In addition, questions from the audience are answered.

The program will air on PHX11 at the following times: 6 p.m. Saturday, Nov. 1; 3:30 p.m. Sunday, Nov. 2; 10 a.m. Monday, Nov. 3; and 11 p.m. Monday, Nov. 3. PHX11 is the city’s award-winning, 24-hour cable news and information television station. The station has been providing news, information and entertainment for Phoenix residents since 1984. For additional program replay times, click here.