As you probably know, HUD had a minimum hold time on a property of 90 days before it could be sold (to avoid “quick flips”).The minimum hold meant that FHA would not insure a property sold in a flip of a shorter hold time.

Needless to say this strange and arbitrary limitation did not help people trying to fix and flip houses, nor the local neighborhoods where such fix-and-flips would have created a positive effect.

HUD has now (as of January 15th, 2010) recapitulated - temporarily, and lifted the limit for the duration of one year. Hopefully it will stay like this.

Here is the link to the HUD website announcing the news.

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For those of you that may be interested in attending, I have been invited to be on a real estate experts’ panel at the Berkeley Finance Conference 2009 at the Haas School of Business at UC Berkeley.

The conference theme is “Recovery - What will it be like?”

It will be on Friday November 13th. The real estate panel is between 4:00-5:30 PM at the Wells Fargo room.

The conference is an all-day event. The keynote speaker is Dr. George Akerlof – winner of the 2001 Nobel Prize in Economics and a professor of Economics at UC Berkeley.

A link to the conference info is:
http://groups.haas.berkeley.edu/fc/conference/index.html

Attendees can register at:
http://www.acteva.com/booking.cfm?bevaid=191379

I hope some of you could attend.

Adiel

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Many of you may know by now that Arizona governor Jan Brewer signed HB 2008 on September 4th 2009. HB 2008, among other things, repeals SB 1271 which called for adverse changes to Arizona’s anti-deficiency laws.

Thus Arizona’s anti-deficiency is as strong as it was before SB 1271.

We had a tele-seminar with an Arizona attorney regarding a detailed explanation of Arizona’s anti-deficiency laws. We have recorded it and can share it with you.

Please just contact us (details at our main web site www.icgre.com).

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Although I am not an attorney, I have been talking to attorneys and the message I get regarding short sales is always: Beware!

Many of us are using loss mitigation experts to assist us in attempting to short sell properties we wish to dispose of that are underwater.
There is a notion, which is mistaken, according to the attorneys I have talked to, that just closing on a short sale (which means the lender approved it), magically gets rid of our potential liability for any deficiency.

I believe this is entirely false.

Every attorney I talked to emphasizes that even if the lender has approved of a short sale, there needs to be SPECIFIC LANGUAGE in the contract as well as in the closing documents, stating explicitly that the loan has been satisfied fully and that the lender will not retain the right to sue for a deficiency at a later date.

I have been talking to many of you about my on-going recommendation to use a lawyer in conjunction with the short-sale specialist you are using. I believe this is quite important and this blog post enables me to warn everyone I may not have talked to. We also put this post in our recent newsletter. The lawyer can compose the right language to be put into the short sale contract, make sure that the right language is present in the closing documents, and demand that the lender put the right language in the documents before closing.

I believe using a lawyer while attempting the short-sales is a great safety mechanism. Just because you closed on a short sale does not necessarily make you immune to a future deficiency suit. The lender may even just sell the note to a collection agency who then may attack you and try to collect.

I recommend taking the necessary steps to get legally protected in a short sale.

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A couple of months ago we held a tele-seminar with attorney Bill Kozub out of Phoenix, AZ.

Bill talked about the anti-deficiency law in the state of Arizona and how it is quite generous in protecting the borrowers against deficiencies in many cases when it relates to single family homes on regular sized lots (under 2.5 Acres).

We were very surprised to hear that about 30 days ago, the Arizona governor has approved a legislation called SB 1271 that severely reduces this protection, especially for investors.

Rather than try to describe the vagaries of the new language involved with SB 1271, I would say it’s worthwhile doing a search for “SB 1271” to read the details for yourselves.

If this is truly final, it will greatly reduce the anti-deficiency protection in Arizona. It is supposed to start to take effect as of 9/30/2009. This begs the question – what does that mean? Does it mean it will apply to a foreclosure that occurred past 9/30/2009 on a loan taken out in the past? Think about it – if this is really the case then it is retroactively “pulling the rug” from someone who may well have taken their loan in the past knowing about the Arizona anti-deficiency laws and counting on them. I wonder how it will hold up legally (I am not a lawyer so the great legal minds can chime in here for their feedback).

It seems quite clear the AZ government was not aware of the full unintended consequences of this legislation. Needless to say many real estate organizations are fighting it tooth and nail and I read that the person who had actually brought this piece of legislation up in the first place has now “seen the light” and he himself is asking for its repeal (sources only from the net so it’s only hearsay).

There is no doubt that if passed, this legislation could also hamper Arizona’s real estate market recovery. Before SB 1271 Arizona held a clear edge over many other states and thus would be a magnet for investors and others to choose to buy in it over other states. With SB 1271 investors and others may distribute their buying over many states, hurting Arizona’s special edge and thus possibly its recovery.

Let’s stay tuned to see the final results of this drama. It could affect many owners of Arizona real estate dramatically.

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We got this from Ofir Levy, our Phoenix east-side broker and manager.

This is an article by Nicholas Riccardi from 5/18 published in the LA Times.

As we have been discussing, the low price-point in Phoenix is starting to stir up interest on the part of both homeowners and investors.
Some of the push has been provided by the recent news about Phoenix “Leading the country” in price falls – about 50% from the peak. In reality there are deals in Phoenix that are already there at less than 50% from the peak values.
Needless to say, multiple offers are now de-rigueur for well-priced bank foreclosures.
Foreigners are waking up to this as well. I read articles in foreign media telling the story of both Phoenix’s steep fall and the high interest in buying there. Such articles spur foreign interest and , despite the foreigners’ difficulty in getting loans, the prices are low enough for many people to offer cash.
Funds that buy cash are in a good position these days, as the banks usually prefer to accept an all-cash offer even if it’s lower than financed offers.
I believe other markets that will follow shortly are Las Vegas, Orlando, and other Florida cities.

Phoenix’s housing bust goes boom
By Nicholas Riccardi , May 18, 2009 LA Times

More homes are selling than at any time since 2006. Buyers find themselves in bidding wars over low-end properties. It’s what a national housing recovery could look like.

Reporting from Phoenix — After four years of renting because they were priced out of the real estate market, Jamia Jenkins and Scott Renshaw concluded the time had arrived for them to buy.

Read full article on LATIMES.COM

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