Tempe

I recently sent out a link to an article that appeared on MSNBC.com about a legal procedure that has allowed some people to force banks that are trying to foreclose on them to back off. A high percentage of loans have been bundled and sold on the secondary market, making the original documentation hard to find. By obliging the banks to produce the loan documents in a court of law, some judges have ruled in favor of the borrowers. However, this only works in some states.

Two Arizona attorneys who received the link to the article were quick to point out to me that this does not work in the state of Arizona. Here’s what one attorney wrote: “This strategy probably will have little utility in Arizona because most foreclosures are non-judicial and production of the note as a trial exhibit occurs only in judicial foreclosures.” In Arizona, it all hinges around a Deed of Trust: “The required documentation for Arizona foreclosures by Trustee Sale is already recorded, in most cases.”

What about filing a court action to seek an injunction to stop the Deed of Trust sale? Forget it. “This can be an expensive proposition not likely to succeed without already having additional evidence questioning the lender’s right to proceed.”

So there you have it. In judicial foreclosure states (not Arizona, generally speaking), the lender files the foreclosure action in court, and the homeowner can use the rules of procedure (such as requiring documents to be produced) to delay or defend against the action. Most Tempe homeowners facing Trustee Sale foreclosure proceedings don’t have these built-in procedural rules available for them to work with.

This well intentioned experience has provided a reminder to all of us involved in Tempe Real Estate transactions to make sure we get our legal and tax information from qualified professionals.

If you have further questions regarding Tempe foreclosures please contact one of my two legal watchdogs.

My Real Estate Wish List for President-Elect Obama

1. Get the foreclosures off the real estate market. One of the major factors depressing the Real Estate market is the sheer number of foreclosures being dumped on the housing market by banks, which is also happening right here in Tempe, AZ. If the new administration can find a way take the foreclosures off the real estate market (by covering monthly mortgage payments for the banks, putting people back to work shoring up and maintaining these properties, then bringing them back onto the housing market slowly) — this would have an immediate impact on the supply and demand of the Real Estate market and average home prices would quickly recover. Tempe’s communities and local real estate market would greatly benefit from removing these foreclosures off the housing market.

In time, these foreclosed homes could sell for more than they are listed at now.  (Sheila Bair, head of the FDIC, was reported to be strongly advocating government intervention to help refinance mortgages threatened with foreclosure.)

2. Help first-time home buyers get back in the housing market. I would defer to my colleagues in the lending industry to come up with a solution although I would imagine that the appropriate carrot and stick for helping first-time home buyers could be provided by the administration. This would start the engine cranking. First-time home buyers would get back in the market and those who are trying to sell their homes could move up the Real Estate ladder to bigger and more expensive new homes.

3. Credit those who are making the community Green. Provide credit opportunities for homeowners and builders working to make their homes greener and more energy efficient. This could be an economic engine with far-reaching effects for both the construction industry and the planet.

The Impact of Obama as President-Elect

The impact on the economy in general will be positive. There will definitely be an international financial market recovery spurred by the popularity of Obama abroad that should impact our own financial markets. This breath of fresh air and the ensuing political honeymoon will be favorable for all aspects of the economy until the tough decisions and real belt tightening have a chance to work. By the New Year, I believe we will see some immediate positive impacts occurring in the Real Estate market … so get ready to act quickly if you want to ride the wave.