Brent T. White, Associate Professor of Law with the James E. Rogers College of Law at The University of Arizona has published a fascinating paper of why homeowners who are underwater ought to simply walk away from their mortgage.
One concern with walking away is the impact on your credit. Professor White discusses this. And other writers have speculated that the credit rating bureaus will not treat defaults in 2009 and 2010 the same as with a default in say, 2006. There will be so many that the old scoring rules must change.
Don Grafues
Resource: The University of Arizona James E. Rogers College of Law
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One contributing factor to the continuation of low interest rates available in Cochise County is the Federal Reserve’s purchase of mortgage backed securities. But speculation abounds on what will happen when the $1.25 trillion program comes to its scheduled end in March, 2010.
The consensus opinion is that the program will be extended. Unemployment is not expected to have recovered much by then and with foreclosures continuing (see our post on the number of mortgages "
Arizona Underwater"), the FED will very likely extend the program. And when the program does eventually wind down, the expectation is that rates will only go to a level between 5 and 6 percent.
You can read more on this topic in an
article published today by Lisa Scherzer at SmartMoney.com.
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Art Is Ageless
The San Pedro River Arts Council is presenting an integenerational art show during Benson’s (AZ) "Christmas on Main Street" December 12. Click on the image for details.
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Arizona has the distinction of being number 2 in the nation when ranking the states by the number of homeowners who owe more on their home than its value. Unfortunately all we have is state data, no data for Cochise County.
Ruth Simon & James R. Hagerty of
The Wall Street Journal wrote an
article in last Tuesday’s edition outlining some of the numbers of "underwater" mortgages and the effect they may have on the housing market. Some of the salient points;
- 47.9% of the mortgages in Arizona have negative equity, second behind Nevada at 65%.
- Another 4.5% of the mortgages in Arizona are within 5% of having negative equity.
- These properties can slow recovery as they go into foreclosure and end up on the market with depressed prices.
- Over 40% of home owners who purchased at the housing peak in 2006 are now underwater.
You can also see a map of the United States
here color coded for the percent underwater.
Don Grafues
Resource: The Wall Street Journal
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Douglas 1948 site built home redcued to $68,000.
1248 E. 12
th Street, Douglas, AZ site built home
reduced $8,500 to $68,000. This home has great lines and construction typical of mid-century homes. Adjacent properties also have individual character and charm. This is definitely not a tract home. Clcik on photo to go to property details.
Don Grafues
Resource: HUD
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1111 Hunt Ranch Road, Huachuca City
1111 Hunt Ranch Road, Huachuca City, AZ, manufactured home
reduced $8,100. New price $72,900. Home sits atop a mesa with great views. Click on photo to see property details.
Don Grafues
Resource: HUD
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Foreclosed and vacant homes are becoming the site for parties according to a November 23
rd article by
Larry Copeland of the
USA TODAY.
In the article you can read about one home in Atlanta that was used for a Halloween party in which 1,000 people paid $20 each to have a good time. In this particular case, the house was rented for the pary but that is not always the case.
Some vacant homes are broken into for parties. The article tells how the Tempe (AZ) police carry lists of foreclosed homes so they can check to be certain the home is truly vacant.
If you live in Cochise County and see suspicious activity around a vacant home, call the Sherrif’s office or local police.
Don Grafues
Resource: USA Today, Larry Copeland (11/23/2009)
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If you have been with us for a while on this Cochise County real estate blog you have seen articles on the housing market recovering, the housing market declining and the housing market not changing. There is a plethora of "experts" making predictions.
Realtor.org published an article yesterday ("Real Estate Market FAQs") which led me to their source article in The Wall Street Journal. Going to the original WSJ article, you will find a reasonable attempt to answer the ten most frequently asked real estate questions of today.
James Hagerty, writing for
The Wall Street Journal answers the following questions:
- Is the housing market getting better?
- When will housing bottom out?
- What signals should I watch to determine whether my local market is improving?
- How can I figure out the value of my home?
- Does it matter whether I’m "under water?"
- If I lose my home to foreclosure, how long will it take to repair my credit record?
- If I’m renting, is now a good time to buy a house?
- Can I get a tax credit if I buy a home now?
- Can I get a mortgage on attractive terms?
- Should I invest in foreclosed homes?
Click on the James Hagerty link above to see the answers.
Don Grafues
Resource: The Wall Street Journal, James R. Hagerty (11/17/2009)
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