Posts from — July 2009

I had the opportunity to attend and speak at a Senate meeting today to discuss the new anti-deficiency law.  Myself, Attorney Marc McCain, AAR President Tom Farley, and others were on hand representing Arizona homeowners, consumers, industry professionals, and the greater good of the State of Arizona.  Opposing our stance against the new bill were various banking officials all of whom seem to believe that this bill is “good” for Arizona.

This bill basically says that a bank may pursue a deficiency judgement against anyone that defaults on a home loan and does not meet two criteria:

1.  Must have lived in the property for 6 months
2.  Must obtain a Certificate of Occupancy

Own an investment property that you planned to use to retire on?  JUDGEMENT!   Maybe you own a second home in Flagstaff or Prescott?  Don’t live there 6 months?  JUDGEMENT!   Did you buy a home for your kids for college, or your parents?  Guess what…JUDGEMENT!  Can’t pay the judgement?  Don’t worry, the lenders can come after your primary home, your checking account, your savings, and any change that falls out of your pocket as they slam the door of your home behind you and leave you on the curb.

Arizona homeowners – What do you think about this?  How can this help us in this time of economic  turmoil and Arizona real estate chaos?

It can’t!

This bill serves to do nothing for the Arizona homeowner and serves only to allow the same banks that should have underwritten loans properly in the first place the right to come after just about anyone that they feel they can squeeze money out of.

This bill NEEDS to be repealed before it goes into effect!  Contact the state legislature today and let them know what you think!

Please email me at Sean @ AzHomeHelp.com as well as Attorney McCain at mmccain @ mblawaz.com with your thoughts and feelings so we have proof of Arizona consumer support behind us.  Remember, this bill affects you, your neighbors, your family, and your future.

Why do lenders not want to foreclose on property?  We’ve all heard that the lenders would much rather do a short sale than have to take a property back but why?  What costs does the lender incur?  Here are the top 10!

1.  Lost principal & Interest Payments – This one is pretty obvious — the lender is no longer receiving payments from the borrower.

2.  Taxes & Insurance — The lender now becomes responsible for making the tax & insurance payments.  Death & taxes!! (even lender’s aren’t immune to this one!!)

3.  Maintaining the property – Once the lender owns the property they are responsible for the upkeep.  This includes yard maintenance, safety code issues, security, etc.

4.  HOA Fees – Oh yes…we know about these here in Arizona, don’t we?!!  The HOA sees everything… And boy do they want their money too!!  The lender needs to not only keep the property up to specs with the HOA they also need to make sure that the dues are paid each month…and HOA dues for some Arizona luxury condos can reach over $1,000 per month!

5.  Servicing fee income loss – If the loan was sold to an investor and a servicing company is handling it, they are no longer able to collect their fee which comes from the payment so there is this loss of fee income.

6.  Collection costs – Servicing loans in default can cost over 3 times as much due to much extra needed resources!

7.  Legal costs – Lender becomes responsible for covering all the legal costs to process the foreclosure.  And don’t think their lawyers come cheap!

8.  Administrative costs – Title fees, court costs, sheriff’s fees, auction fees, trustee fees, etc.  Wow, this is REALLY adding up!!

9.  Restoration of the property – The bank doesn’t want to sit on the property, they want to sell it!  So they may have to do some repairs to it first…money money money!

10.  Commissions to sell – Yup, believe it or not real estate agents charge a commission to sell the property and who pays this cost?? The bank of course!

Add up all of this and it’s a hefty sum.  Then take into account that an REO listing (a Real Estate Owned, or bank owned property) usually sells for less than market value so there is that loss as well.

The banks take quite a hit taking properties back in foreclosure!  Anyone want to argue why they would be more willing to do a foreclosure than a short sale?

For more short info or to get your property on the market TODAY visit our Arizona Short Sale website.

I had the opportunity to sit down last week with Certified Credit Restoration Expert Mick Bernard.  Mick is the president of Credit Strategies, a credit consulting firm based in Scottsdale Arizona.  Mick was kind enough to allow me to share some of the credit tips he gave me so here they are!

5 Ingredients of an Ideal Credit Score

1.  Make your payments on time – This is the most important ingredient to having a good credit score.  Late payments, collections, charge-offs hurt you in this category.  Time heals though, as the earlier the delinquency the more of an impact it has.

2.  Amount of Debt you carry – the next most important ingredient.  Mortgages & Auto loans are part of this but the most important part is your credit card debt.  Visa, Mastercard, American Express, and any other revolving account like gas cards and even department store cards.  The balances you carry vs. your available credit calculates your “revolving utilization percentage.”  The high this number, the more of a negative impact to your score.  You can actually calculate your utilization percentage by adding up all of your card balances and dividing them by the total credit limits that you have available.  Then multiply that number by 100.

3. Age of Credit History -  The longer your accounts have been open, the more points you’ll earn for this score.  Dont try to remove good accounts from your credit report because that will shorten the history of your file.  As accounts age, you will automatically earn more points!

4.  Credit Mix – You’ll do well here if you have a diverse list of accounts on your credit report.  The ideal mix is 3-5 revolving accounts, a mortgage account, and a car loan.  If you currently have more than 5 revolving accounts, DO NOT START CLOSING THEM!  Remember, it’s more important to have a good, lengthy history than to have the proper mix.  Some quick advice – if you have less than 3 revolving acounts then open up another one. If you have more than 5 only close an account if it’s been open for just a short period of time.

5.  New Credit Inquires -  Only apply for credit when you need it because each inquiry can affect your score.

And there you have the 5 ingredients of an ideal credit score, straight from a professional credit repair specialist!  Mick shared more with me but we’ll save that for later posts or send me an email if you’d like to hear about it now!

Mick is currently accepting new clients for his services which include:  Credit repair/restoration, Debt Settlement (Settle for pennies on the dollar on your past due accounts!), Educational classes, and more!  You can email Mick at Mick @ 911CreditPro.com and be sure to check out their website at www.911CreditPro.com.  They are located in Scottsdale, Az at 15849 N. 71st St. #100 and can also be reached at (480) 502-5554.

I’ll post more information from Mick & Credit Strategies on my website as well at AzHomeHelp.com.