Monday, August 07, 2006

Over 800 Phoenix Defaults In July

The Arizona Republic has this report on Phoenix. "More Valley homeowners are in danger of losing their homes than at any point in more than a year. Last month, 837 homeowners got notices that they were at least three months behind on their mortgage payments. Those notices mean their mortgage firms are getting ready to evict them and auction off their houses on the courthouse steps."

"This is just the beginning. Tom Ruff of Phoenix-based data firm Information Market, which tracks the foreclosures, said that by year-end trustee sales could be climbing by 100 a month. In June, there were 776."

"Why the increase? Thousands of people used the non-traditional mortgages last year to afford a house in the Valley, where home prices jumped nearly 50 percent. On many adjustable-rate mortgages, the monthly payment on a $250,000 loan could easily climb by more than $100 every six months."

"Arizona incomes aren't climbing at the same rate, and Valley housing appreciation is pretty flat. So unless homeowners win the lottery or take a second job, they don't have a big chance of catching up on their mortgage payments."

"Troubled metro Phoenix homeowners had been able to quickly sell, usually for a profit, until recently. The number of homes for sale across the Valley has tripled in the past year."

"At the same time that trustee notices are climbing, canceled trustee sales, properties that are sold or mortgages that are caught up to stop the foreclosure auction, fell to their lowest level since 2001. Tim Rocho, CEO of Scottsdale-based Real Estate Fortune, said many of the homeowners in trouble are too highly leveraged to sell or refinance and get out from under their debt."

3 Comments:

At 10:23 AM, Blogger OC BEAR said...

Anywhere we have this "Creative Financing" and appreciation under 6%, I believe this will be the theme.

Problem is, this is just the beginning.

OCBear

 
At 9:36 PM, Blogger Jonathan said...

I am visiting Phoenix for the first time this week and besides the heat, I note that it is a geographically spread out city. I would therefore suspect that the recent jump in energy costs may be playing havoc with budgets and also contributing to default rates. I wonder if there is any statistical correlation between mortgage defaults and high energy costs.

 
At 10:17 PM, Blogger Jayman1957 said...

Jonathan,

You used to be able to buy Heating oil at 80 cents or so a gallon in the summer not that very long ago here in Mass. I just bought some at $2.45 a gallon in August.
Heating bills were blamed for some of the late mortgage payments here in the papers last winter.

 

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