Phil Mahr

So many people claim to be victims of the hyper-inflated housing market of 2007. Apparently, the average American thought that an average working class family would be able to afford a $900,000 single family 3 bedroom home in Arizona by 2013. Others were just lured by the temptation of buying a new boat or vacation when they didn't have the money for it. Or scarier yet, maybe they just didn't think at all.

After reading an article from the AP about the $25 billion lawsuit settled between the federal government and the banks, I felt relieved that the banks are officially being held accountable for the role they played in creating the foreclosure crisis. But what about the role that the average American consumer played in their own downfall? Without formally placing responsibility on consumers as well, are we reducing the accountability of the average American? Has it become fashionable to admit that Americans are incapable of resisting the will of corporate greed?

Now those who have the means to buy all of these homes at foreclosure auctions are transferring the wealth and power to themselves. It seems we are in the midst of a huge shift of wealth and power in the U.S.

Phil Mahr is a Realtor, real estate investor and foreclosure auction specialist in Arizona and California. He can be reached at (310) 663.5478 with questions or comments.

FORECLOSURE AUCTIONS IN ARIZONA

I had lunch yesterday with a client who is currently enlisted as an officer in the Navy. As an officer, he is doing quite well. Although his occupation takes him and his family around the world, he is able to invest a portion of his wages in real estate. Currently he is being transferred from Coronado Island in San Diego to Japan for two years. He's in Arizona today learning about the trustee auction process, so he can buy a rental home here before he heads to Japan.

Unlike my client, most enlisted men and women are struggling to survive this tumultuous economy. It is troubling to know that many of our servicemen and veterans are facing foreclosure or being denied lower rates after serving both overseas and domestically.

According to Jim Kuhnhenn of the AP:

March 6, 2012

"President Barack Obama is aiming mortgage relief at members of the military as well as homeowners with government-insured loans, the administration's latest efforts to address a persistent housing crisis.

In his first full news conference of the year Tuesday, Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.

The efforts Obama is announcing do not require congressional approval and are limited in comparison with the vast expansion of government assistance to homeowners that he asked Congress to approve last month. That $5 billion to $10 billion plan would make it easier for more borrowers with burdensome mortgages to refinance their loans.

A separate plan, the Home Affordable Refinance Program, which allows borrowers with loans backed by Fannie Mae and Freddie Mac to refinance at lower rates, has helped about 1 million homeowners, well short of the 4 million to 5 million the administration had expected."

"About a quarter of all U.S. homeowners, about 11 million, are underwater on their homes, owing more on their mortgages than their homes are worth, according to CoreLogic, a real estate data firm.

About 30 percent of home loans started last year were through the FHA. Many first-time home buyers use these loans because they only require 3.5 percent of a home's price as a down payment, instead of a typical 10 to 20 percent in the private mortgage market.

For service members and veterans, Obama will announce that major lenders will review foreclosures to determine whether they were done properly. If wrongly foreclosed upon, service members and veterans would be paid their lost equity and also be entitled to an additional $116,785 in compensation. That was a figure reached through an agreement with major lenders by the federal government and 49 state attorneys general.

Under the agreement, the lenders also would compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment."

It is troubling that until now, there has been no effort to assist service members who are struggling with a depressed economy and deflated real estate market. These men and women have devoted their lives to our country, yet lenders are not obligated to work with them in the instance that they have to sell or face foreclosure due to circumstances beyond their control, such as military reassignment. Lets keep our fingers crossed that the President and Legislature will fill in some gaps in this system.

Phil Mahr is a Realtor, real estate investor and trustee auction specialist in Arizona and California. He can be reached at (310) 663.5478 with any questions.

CLICK HERE TO LEARN MORE ABOUT HOMES BEING SOLD AT TRUSTEE AUCTION IN ARIZONA

I was having a few cold ones Friday night with a good friend who was describing his new position at the large bank he works for. He's an accountant heading up a department of legal professionals dedicated to pursuing default judgments on defaulted land loan borrowers. My friend is a very nice guy on a personal level, but give him the task of going after a bunch of careless "pie in the sky" dead beat land speculators, and watch out. Simply put, he loves his job.

Most of us here in Arizona and California know that there is anti-deficiency laws to protect us from recourse in the event that our residence is foreclosed and sold at trustee sale. Simply put, if the bank has to sell your house at a trustee sale for less than what you owe, they can't sue you for the rest. Most investors in the region also know that this protection does not apply to land or construction loans. If you have a loan on land or construction and you don't pay it back, the lender can and most likely will sue for the deficiency after the trustee sale.

My friend was telling me about his negotiations with a particular borrower who has gone into default. She bought land in Arizona on speculation, the land value "tanked" and she quit paying on the note. To make it even more interesting, she is an attorney who believes that her primary residence (which she has plenty of equity in) is protected from being attached by the lender due to the homestead act. Also, she has told my friend that the no-recourse laws in Arizona offer her a degree of protection.

He has countered her argument by making the point that the anti-deficiency laws apply to the specific loan tied to the particular residence. In this case the bank will seek a judgment against her for a defaulted land loan, then attempt to levy her assets. The equity she has in her house is an asset, and my friend is confident that they can attach her home with a deficiency judgment after the trustee sale. The defaulting lawyer is confident that they can't .

I'm an expert in Arizona real estate, but I'm no lawyer. It will be interesting to see the outcome of this battle.

Phil Mahr is a Realtor, real estate investor and trustee sale expert in Arizona and California. He can be reached at (310) 663.5478 with any questions or comments about the current real estate market in Arizona.

TO LEARN MORE ABOUT BUYING HOMES AT TRUSTEE SALE CLICK HERE.

It's no secret that Canadian real estate investors have converged on the Phoenix housing market with a furious vengeance.

According to Catherine Reagor from The Arizona Republic

There’s a shift in who is investing in metro Phoenix homes. Californians are no longer the region’s biggest group of out-of-state buyers.

Now, the dominant group of out-of-state buyers is from outside the country. Canadians bought 405 Phoenix-area houses in April, according to the Information Market.

As a Buyer's Agent for both Canadian and California investors, I have witnessed this change first hand. Canadians seem to be more confident about a speedy recovery of the US economy..

Not to mention that the idea of investing in a warm, sunny climate such as the one we enjoy here in the Southwest is very appealing when it's 30 degrees in the middle of the afternoon. Many Canadians with cash aren't hesitating to invest in multiple houses in the Phoenix Area. And they pass the word on to their friends and family. It has become somewhat of a viral phenomenon.

I have even represented professional Canadians in their 20's and 30's. As far as they're concerned, its a "no brainer". They want to take advantage of the once in a lifetime opportunity to buy houses here for the same price as their baby boomer parents paid a generation ago. They recognize a good opportunity when it presents itself.

The biggest challenge they faced was that they were handicapped by the restrictive guidelines which lenders were imposing. Until recently, Canadians who wanted to finance more than one income property or vacation home were out of luck. There wasn't a lender around who would underwrite a loan for a second income property for a Canadian investor. That has changed.

Now Canadians wishing to finance multiple investment properties in Arizona can get the money. Some of them have more than ten mortgaged properties, and are benefiting from the positive cash flow, tax advantages and looking forward to the future equity they will enjoy when it comes time for retirement. Not to mention the warm, sunny weather.

Phil Mahr is a real estate investment advisor, investor and trustee sale specialist in Phoenix. Give him a call at (310) 663.5478 for more information about investing in sunny Arizona.

CLICK HERE TO SEE HOMES TO BE SOLD AT TRUSTEE AUCTIONS IN PHOENIX ARIZONA

This is the time to fix and flip...

By Phil Mahr

February 28, 2012

Most people are aware that the MLS is dominated by REOs and short sales. A common misconception is that the housing market in cities such as Phoenix is stagnant or defunct. The reality is that houses in Arizona are not low lying fruit, so to speak. The great deals listed on the MLS are more often than not short sales, and the REO listings are often getting multiple offers over list by the time they have been listed for a day. The bottom line is that MLS prices are at their lowest in 20 years, and those who have the means to buy realize this.

In States such as Arizona and California, there are sources of inventory which are not being marketed to the general public. Trustee auctions in Arizona account for up to 30% of the missing MLS inventory. In Phoenix the trustee auctions have proven to be the most popular new source of real estate for considerably less than MLS prices. The auctions are becoming more competitive, now that "hybrid" financing and title insurance have become readily available to trustee sale buyers.

The highest percentage of investors are buying from trustee sales to hold and rent due to the high demand for rentals and the increased desirability of the average tenant. They are benefiting from both the high rate of return on their cash as well as the increase in equity that their portfolio will eventually gain. The other trustee auction investors are fixing and flipping because they can make up to 30% profit on their cash within a few months. In either case, investors are taking the opportunity to capitalize on the unique opportunities that the current housing market offers.

Phil Mahr is a Realtor, real estate investor and a trustee auction specialist. He can be reached at (310) 663.5478.

Click here to learn more about Arizona Trustee Auctions.

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