Kerry Fehr-Snyder - May. 17, 2008 07:05 AM
The Arizona Republic
The Southeast Valley stood out with some of the largest percentage increases in foreclosed homes even as the number of home loan defaults soared across the Valley in the first four months of the year compared with the same period last year.
The number of foreclosed homes in two of Tempe's three ZIP codes posted 1,000 percent increases, an unfathomable number that is hard to comprehend because of the way percentages are calculate.
Indeed, the 85282 ZIP code south of U.S. 60 between McClintock Drive and Rural Road saw a 1,367 percent increase, according to Information Market. That increase gave it the unenviable rank of No. 2 in Valley in the first four months of the year. Sun City's ZIP code 85351 was No. 1, going to 31 foreclosures from two for the same period a year ago.
Nearly as bad was Tempe's 85281 ZIP code, which saw a 1,350 percent increase through April compared with the first four months of 2007.
Many of the loan defaults have come because of investors and home buyers who found themselves upside down financially because they owed more than the home's appraised value.
Some of those home owners decided to walk away from their homes and risk a black mark on their credit ratings rather than trying to stay up with mortgages that were calculated in the sub-prime lending debacle and ballooned beyond their affordability as the national, regional and local real estate markets collapsed.
Scott Stone, who owns a home in north Phoenix's Tatum Ranch and is waiting to buy a home today, in the new northeast Mesa Blandford Homes Mountain Bridge development, said he has neighbors who refinanced during the real estate run-up.
"You're morons for refinancing and being upside right now," Stone said.
The real estate crash has left many mortgage lenders and brokers scrambling to sell homes they foreclosed on or are trying to unload through a short sale in which lenders accept less than what is owed on a home.
In the Southeast Valley, some of the hardest hit areas are on the fringes, such as in Queen Creek or Pinal County.
But some of the biggest percentage increases in foreclosures have occurred in closer-in communities, such as Chandler and Mesa. In Chandler's southeast 85226 ZIP code, for example, the percentage of foreclosures jumped 925 percent.
Mesa's 85207 ZIP code, meanwhile, saw an increase of 870 percent. And Gilbert's 85234 ZIP code saw a loan default increase of 872.7 percent.
But like all numbers based on percentage changes, the numbers can be misleading. For example, Chandler's 85226 ZIP code went to 41 from 4 foreclosures during the four-month period this year and in 2007, respectively.
Gilbert's 85234 ZIP code, by contrast jumped to 107 from 11 foreclosures and yet posted a smaller percentage increase than Chandler's 85226 ZIP code default percent of 872.7 percent.
Similarly, the increase in Ahwatukee's foreclosures look huge percentage-wise but are still relatively low at 35, 20 and 54 for the ZIP codes 85044, 85045 and 85048, respectively.
Regardless of a community's default numbers, lenders and real estate agents warn borrowers to think twice before walking away from their investment especially since the federal government revised mortgage debt rules by no longer taxing borrowers on the amount lenders forgive.
Under a Feb. 12 revised IRS rule, homeowners whose mortgage debt was partly or entirely forgiven may be able to claim tax relief with newly revised Form 982. Previously, debt forgiveness was reported by lenders as taxable income to borrowers.
No comments:
Post a Comment