Freddy Saavedra, Certififed REO Specialist

I am trying to give a name to this concept, whereby, a person who has no financial reason for not making payments on their mortgage, decides to do so anyways in order to negotiate a lower price. Often the person loses their home, which they may perceive as a good thing since they are so upside down.

I have seen this quite a bit here in Phoenix, especially, in some of the newer areas where prices have dropped dramatically. I have heard of many people deciding to lose their homes rather than keep paying on something that is now worth much less than what they paid for. It hardly seems fair to them that even though they played by the rules and saved to purchase a home, they are now adversely affected by the decisions of others. I have seen this a lot and am afraid it might be a growing trend.

Does this happen in your area? What should we name it sympathy or empathy foreclosures. I vote for the latter, and I hope the new laws will help eliminate this concept before it brings further turmpoil to this current market.

I have just recently converted to GPS to be able to find my properties. A few bad experiences in Queen Creek( asmall town outside of Phoenix) told me I had to get some help finding these homes. As many of you know a buyers tour can take you many places and to many homes in a small amount of time. This is not the time to get lost or to ask for directions. I always carried with me a map of wherever I was going to, and, as much info as I could get off of Mapquest.

This system has worked great for me for a few years, it also helped that I was very knowledgeable about the areas I was showing. With all the new construction in Phoenix, however, maps quickly become outdated as new streets are being built and named. Anyways, long story short, I got really lost and was less than successful in my buyers tour in Queen Creek. As Queen Creek is a few hours away from my corporate office it was less than thrilling to know that I had to return the next day and finish my buyers tour.

I purchased a Garmin GPS module for my laptop. It is the USB Model 20 and it is a lifesaver. You get detailed maps of where you are and can quickly input new addresses and have the software setup the best way to get there. If you make a wrong turn the Garmin Software automatically reroutes you and finds the best way to get you back on the road. I have yet to go on a buyers tour withour my GPS, even if I know the area, I take it with me just in case. It has been wonderful, and, with its automatic routing of the best method to visit all the addresses I input, it has saved me both time and gas money. At a price of only $99 it is a steal.

Many of the Realtors I know purchase the midrange model in the $300-400 price range. You do not have to purchase the entire module if you have a working laptop with a USB connection. All you need is the software and the GPS receiver which are, together, averaging less than a hundred dollars. Yet because of your laptops processing power you get a bigger screen than a GPS Module and more processing power! What else can you need?

Oh did I mention it can track hotel and gas prices! You could find gas stations or hotels by price, distance or name. Not too bad for only $99. If you have considered purchasing a GPS why not try just the receiver and not the entire processing unit, especially if you have a strong processor in your laptop already!

As we work to close and put under contract the final deals under the current Down Payment Assistance Program, I am left wondering: What happens now?

While I, like many of you, fully understand the reasoning behind the decision to change from DPA approved for FHA loans to require a 3 1/2 percent down payment, I wonder if now is the right time to make this change. With the rising prices in food and gasoline, many would be first time home buyers are finding it increasingly difficult to come up with a substantial down payment to get a solid loan.

The Ameridream program, and, others like it made the dream of home-ownership possible to many, many people. Without this loan program many buyers will simply have to postpone their dream of home-ownership to a time when they can save for a substantial down payment. When that will be nobody knows, but the present market, at least in Phoenix, makes it the perfect time to buy a first home and many would be first time home buyers may not be able to take advantage of these prices.

With prices deflated through the downtrodden Real Estate market. Home prices are as low as they have been in close to 8 years in some areas. We may never see prices this low again. We have a lot of Lender owned properties in the Phoenix Metro Area who compete for the small pool of qualified buyers, most of which use the Ameridream program to purchase these homes. What will the lenders do with all these homes once this program goes away?

Many buyers are currently submitting contracts in the hope of getting an Ameridream loan prior to the program going away. With the low prices on some outstanding buys, I have seen many homes receive more than 10 offers in a matter of days by buyers eager to take advantage of this program. Many of these homebuyers will not be able to purchase a home without Down Payment Assistance. So what happens now?

I know many of you in the Active Rain community have seen markets such as these before, hopefully you can let those of us who havent seen this before how to navigate through this market without this very important tool to work with.

Please help me welcome Daisy Montano to the Active rain community. Daisy is new to Real Estate after spending time as a Military PoliceWoman in the U.S. Army. She has recently graduated from Real Estate school and looks forward to helping families make their homeownership dreams come true. I will be helping her integrate herself into the activerain community and Real Estate in general.

She will be specializing inthe West Valley Phoenix Area in first time home buyers and investors. She has already gained experience working with lender owned properties as a transaction coordiantor so it is safe to say that she will hit the ground running. If you see her start bloggin, please stop by to say hi.

As we continue the lowering of prices in the Metro Phoenix area I am noticing more and more the rising of what I call sympathy foreclosures. These are people who are not in financial trouble per se, they have not lost their jobs and have not had a medical emergency drain their finances. Rather, these are people who owe, say $250,000 on a home that is now selling at $120,000. These are people who find themselves upside down through no fault of their own.

The average sympathy foreclosee is finding that it is not worth it to keep their home since it is usually worth substantially less than what they owe on it. At a certain point this particular person sees losing or abandoning their home as the only reasonable choice. Generally I have found that lenders will not actively work to adjust loan terms for a buyer who has made all their payments on time, so these, people (sympathy foreclosee's) end up foreclosing on their home even though they usually have the money to pay for them. It is foreclosure by choice and not by necessity!

If the first wave of foreclosures we saw this year where buyers who overextended themsleves, or the buyer who lost his job or had a medical emergency, the effect is being felt by people who have not had any of those things happen to them. It truly shows the interconnectedness of every neighbor to each other. It seems that many people are talking about abandoning their homes or downright doing it just to get out from underneath them. Short sales are not very successful and banks generally are reluctant to offer loan modifications to buyers who can actually pay for their homes.

Everybody loses in a sympathy foreclosure, the lender loses money, the buyer damages their credit and usually they neighborhoods with many foreclosures are less attractive to buyers due to high crime in some of these abandoned homes. Something must be done, but, with the strict language of many loans it is possible that nothing can be done without making the situation worse.

So for the time being I believe we will see a wave of sympathy foreclosures and with them a further downturn in the housing market.