Strategic Default / Short Sale / Foreclosure in Phoenix Area

Strategic Default / Short Sale / Foreclosure

 

 

  Since 2006 Arizona Elite Properties - AZhomes4u.com has specialized in assisting homeowners who are behind on there mortgage payments and facing foreclosure or are already in foreclosure. I can and WILL help you with your options, HELP you identify your options weather it's Short Sale, Strategic Default. Deed in Lieu or HELP you with Loan Mod. Let me Help you identify your options.

 

What Is A strategic default? (Video)

 

A strategic default is the decision by a borrower to stop making payments (i.e. default) on a debt despite having the financial ability to make the payments.
This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house's price such that the debt owed is (considerably) greater than the value of the property — the property negative equity or "underwater" — and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble. Such borrowers are called "walkaways."

This occurs when a homeowner is able to pay their mortgage but because they are underwater or simply sick of the level of deficiency they decide to stop paying. If you voluntarily walk away from your mortgage because you owe more than the home is worth, are you a bad person? Should you even care?

 

 

Why Should I Do a Short Sale?

STOP FORECLOSURE NOW!!

Linda Wieczorek 602-391-8246

Luck doesn't save you from Foreclosure   Knowledge and Experience Does!

 

The answer is pretty simple: To secure your financial future, point blank!  Let's look at your other options...

1.  Do Nothing:  Your lender will file for foreclosure against you, and eventually attempt to sell your home at a sheriff sale, where the will not receive anywhere close to what you owe on the property.  They will sue you and obtain a deficiency judgement for the difference between the total amount that was owed (including fees) and the amount they were able to sell it for.  You will have a completed foreclosure on your credit for 7-10 years or more, and will not be able to buy another home with conventional financing for MANY MANY years.

2.  Get a Loan Modification:  IF your lender grants you a modification after many months of deliberating, they will take the amount you are behind and add it to your balance (this puts you further behind since you probably ALREADY owe more on the house than it is worth).  IF you're lucky, they will drop your interest rate a couple of points.  However, due to the amount they put back onto your balance, your saving will not be very significant.  A study of modified loans showed that close to 90% of the homeowners were in foreclosure again within 2 years!

3.  Just give the house back to the bank:  This is known as a deed in lieu of foreclosure.  The bank still may have the right to pursue you for a deficiency judgement and if you have a second mortgage company, they will most likely not agree unless you sign a promissory note for the balance.  You still must pay the second mortgage!!!  This will also have a VERY negative impact on your credit rating!

"So what do I do???"

A Short Sale!!!

This truly is your BEST option!  AZPrideProperty.com  with your lender to try and make sure that you do not receive any deficiency judgements or promissory notes by actually increasing our purchase offer to the lender!  If we make a little less, than so be it!  We want our clients to walk away free and clear!  

Questions ?? Linda Wieczorek  AZhomes4u@gmail.com

 

Why is it time to Buy a Home !!!!

3 Reasons Why Real Estate is Superior to Stocks

Foreclosures

Phoenix,Gilbert,Goodyear,Avondale 60K-150K

Real estate and stocks are two popular investment vehicles. It is always important to have a balanced portfolio, therefore it is worthwhile to invest in both. However, if you are trying to decide between the two, you might find that real estate provides the better returns more consistently.

Here are the top 3 reasons I believe real estate is a better investment than stocks:

1.) Real Estate is a Tangible Asset. It is a physical investment that you can see and touch. Shares in a company are nothing more than a piece of paper giving you an interest in the underlying company. Although a company’s shares can be valuable, because real estate is tangible it generally provides more value because people can use it in everyday life, and more importantly it is essential!

People must have homes to live in and businesses must have places to operate from. You can live in a house or an apartment, but you cannot live in a share of stock from Google. You can operate a business in a retail shopping center or an office building, but you cannot open and operate your business just because you own stock in Wal-Mart (unless of course you bought the stock way back when and your capital has increased 20X!).

2.) Real Estate allows for Leverage. Now leverage can be a double-edged sword, and over-leveraging a property can cause your asset to become a “money pit” faster than you can say “Bubble”. The over-leveraging of properties coupled with greed is the primary reason why we are experiencing the effects of the recent real estate market crash.

However, responsible leveraging can allow an investor to put up 20-30% of the purchase price of a property and borrow the remaining 70-80% of the purchase price. This leverage will generally allow the investor to realize gains much higher than that of the stock market. For example if you have $100,000 dollars to invest in real estate, you can generally leverage that into a $500,000 property. So your $100,000 will serve as a 20% down payment on a $500,000 property and you will get a mortgage for the remaining $400,000.

If the property appreciates at 5% ($25,000) over the course of a year, that is an unrealized gain of 25% on your invested capital of $100,000. In addition, if the property was generating a positive income, which is always advisable, then your returns would be greater.

Now just to be straight forward, this is the broad view of the investment. It doesn’t take into account closing costs, loan costs, illiquidity of the investment, etc. So there are more costs that would be associated with this investment that would take away from that 25% return and you would still have to sell or refinance the property to realize that 25% return, however, over the course of a few years with responsible leverage, real estate returns far outpace stock market returns. Feel free to contact me if you would like me to justify that claim in more detail. :-)

Stocks can generally only be leverage at a 50% – 100% ratio if you are trading on margin. So if you have $100,000 to invest, you can generally purchase $150,000 – $200,000 worth of stock. Assuming you purchased $200,000 worth of stock and it appreciated 5% ($10,000) over the course of a year, that is an unrealized gain of only 10% on your invested capital of $100,000. And similar with the real estate investment you still have additional fees that will take away from this gain, primarily brokerage fees and interest on the borrowed capital in your margin account.

3.) Real Estate allows for more Control. When you invest in real estate, you generally have control in how that investment is to perform. You can implement strategies to operate the investment more efficiently in order to maximize returns. Unfortunately, with stocks you really don’t have any control in how the company operates in order to maximize your returns on your investment. At best you can submit suggestions to the board of directors, and maybe they will implement some of your suggestions….MAYBE! Great article by Khary Reynolds

Can I Purchase A Home If My Spouse Does A Short Sale?

Via David Krushinsky (Mortgage Professional - Phoenix, AZ - NMLS 202115):

Short sales, in most cases, are one of the most economical solutions for all parties involved when a borrower can no longer afford their home.  The bank typically incurs a smaller financial loss than would result from an ultimate foreclosure or continued delinquency on the mortgage payments.  Borrowers may be able to soften the overall damage to their credit, and potentially settle future deficiency judgments. The big question on hand is.......What is life like after a short sale?? 
If you're married and your spouse has recently had a short sale, you may still be able to purchase a home. 
For the majority of married couples, their homes are purchased together using joint credit, income and assets. This article will address the following situations; the spouse purchased a home before the couple was married in his/her name, or the spouse purchased a home, qualified on his/her own qualifications and the other spouse disclaimed their interest in the property.
Let's take a look at an example of what a typical scenario might look like for a typical borrower.
Mr. Smith bought a home in 2002.  He was forced to do a short sale in 2008 because he lost his job and could only find employment that paid 50 percent of his previous income. When Mr. Smith purchased his home, he was able to qualify on his own and Mrs. Smith was not included on the loan.  Mrs. Smith signed a disclaimer deed at the closing.  Mrs. Smith has since graduated from medical school and returned to the workforce.  Mr. Smith and Mrs. Smith would like to purchase a new home together. Unfortunately, Mr. Smith's credit will not allow him to be part of the loan due to the short sale.  Even if Mr. Smith's credit score has rebounded from the effects of the short sale, Mr. Smith still must wait 2-3 years before he can buy using most traditional financing.
Mrs. Smith can qualify for a home on her own even though Mr. Smith had a short sale less than 2 years ago, provided she meets the standard qualification standards.  Mrs. Smith would like to purchase the home with a FHA loan.  In community property states, such as Arizona, Mrs. Smith can still purchase the home even though the lender will review Mr. Smith's credit history.  However, any additional debts which appear on Mr. Smith's credit report will have to be included in her qualifying ratios.  As long as she can qualify on her income alone, she will be able to purchase a home.  Mr. Smith will have to sign a disclaimer deed, relinquishing all of his rights to the property.
Please note: This article was written per Arizona State laws and other states may differ.  Please consult your mortgage consultant to discuss the laws and regulations applicable to your state.

 

Phoenix, Arizona - Short Sale or Loan modification? Which one should I do?

There are a lot of questions to ask yourself when deciding whether to do a short sale or a loan modification. Probably the biggest one is “Do YOU want to keep the house or not?”

If you’d like to stay in the home or continue to utilize it whether it be as a rental or a second home then you definitely will want to look into a loan modification. Be sure to find a reputable Arizona loan modification company as this industry is full of scam artists. I have a great Arizona loan modification company referral for you — contact me and I’ll pass them on.

Don’t want the property? A short sale may be the answer. With a short sale, you can sell the property, have everything negotiated for you, and you can start over without the mortgage headache or the negative equity following you around for the next 15 years!

We specialize in marketing and selling Arizona short sales, we negotiate all of our short sales in house, and we have a full team of resources available to you so you can have all of your questions answered.

Contact Linda Wieczorek today so we can short sell your home tomorrow!