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Mary Ann Chapman, Realtor-CDPE

Chances are, you or someone you know in the Phoenix Metro area is facing the possibility of foreclosure. But you need to understand that you are not alone.
Today, 1 out of every 6 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it’s important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.
Through my experience handling distressed properties, I’ve found that homeowners today have more questions than answers about their circumstances. I have created this site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners.
You may also have noticed that I’m offering you a FREE Report to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.
As an agent with the CDPE® Designation, I have a strong and unique appreciation of the factors affecting the market, and know that there are options available to you. My desire is to exceed your expectations. Please take the time to browse this website and take advantage of the many links of information that are available to educate you in the declining market of today.

If you would like to know more about your options, please call us at (602) 390-6166.
Our team is here to help … in any way we can.
Respectfully,
Mary Ann Chapman (Team Leader)

What In the World Is HAFA?

www.youtube.com/watch?v=8TXx8rKy-Ow

Income Property – Definition of Income Property – Property bought or developed to earn income through renting, leasing or price appreciation…

I thought this would be a great way to start my Blog. In my opinion there has never been such a great time to buy income property. During the 2005-2006 we saw those peek prices out in the market. I sat back and did the numbers and couldn’t believe people were still buying and banks were actually providing the loans on these properties .Unless you were putting down some serious money there would be no-way a lot of these properties were generating enough income at all to sustain it-self alive. To say the least it was costing investor’s money out of their own pockets each month just to stay afloat. I will list two examples below without identifying the property. Don’t want to ruffles anyone’s feathers. One is the overpriced market back in the 2005 thought 2007, and the other is the current market as we stand right now. We have never had such great interest rates to take advantage of and with these low prices on these properties cause them to cash flow quite nicely. The example below is for a four-plex but many of the same principles still apply to buying a home for income property purposes. Use this example for reference but I encourage you to do your own spreadsheet. Contact out team to help you on your next purchase or sale of property whether it’s residential or income property our team can help you.

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Before__________________________________________________Now__________________

Example 2005- 2006______________________________________________Example 2010

Mesa 4-Plex____________________________________________________Mesa 4-Plex

350,000.00 contract price _________________________________100,000.00 contract price

35,000.00 10% Down______________________________________10,000.00 10% Down

315,000.00 mortgage ( Deed of Trust)_________________________90,000.00 Mortgage(Deed of Trust)

2,612.94 PITI Monthly_____________________________________2,612.94 PITI Monthly

250.00 Water- Sewer-Trash_________________________________250.00 Water- Sewer-Trash

200.00 Maintenance______________________________________200.00 Maintenance

42.00 City Tax____________________________________________42.00 City tax

$ 3,104.94 Total Expenses_________________________________$ 1,309.98.94 Total Expenses

$ 2,400.00 Rents Collected._______________________________$ 2,400.00 Rents Collected.

-704.94 negative cash Flow_____________________$1,090.02 positive monthly cash Flow

I used the information below to gather my numbers.

1. City tax for Income properties 1.75 % of rents collected. This amount is based on 2400 monthly
2. Maintenance includes landscaping and minor repairs only.
3. PMI (principal, interest 6.8%, Property Taxes 1.25%, Insurance 1,200 year, PMI .5%)
4. Rents Collected rents 4 units 2b-2b. 4units X 600 monthly= 2,400.00 (100% Rented)

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AS many families find themselves in a dire situation facing either a short sale or a foreclosure they still need a place to call home. This is helping our multi rental properties as well as our residential rental homes remain in demand.

City Tax Rate for Income property

Many people are unaware of city impose property tax for income property. These can be paid monthly to your city and a license is generally needed for every property. Every city has their own rules so please contact the city you’re your income property resides in for those regulations.

• Mesa 1.75% You have 2 or more residential units available for rent in the State. (Prior to October 1, 2008,the tax code specified 3 or more residential units in the State.) http://www.mesaaz.gov/salestax/pdf/real_property_rental.pdf

• Chandler 1.5% http://www.chandleraz.gov/Content/Sample_Tax_Return_Instructions.pdf

• Tempe 2.0% he Tempe Tax Factor Rate for Residential Rental Landlords is 1.9608%. (Tempe Tax Only – Residential Rental is not subject to state or county tax.) The tax factor rate should only be used when tax has not been separately charged and collected. http://www.tempe.gov/salestax/resrent.htm

Example:

Gross Rent $500.00

Tempe Factor Rate 1.9608%

Tax Deduction (Code F) $ 9.80

Gross Rent $500.00

less: Factored Tax 9.80

Taxable Rent 490.20

Tempe Tax Rate 2.0%

Tempe Tax Due $ 9.80nd collected.

• Gilbert 1.5%: Exemption: If you have only one or tworesidential rentals within the State and nocommercial rentals, you are exempt from Gilbert residential rental tax. However, if your rental property is rented through a broker or property manager, then all property is taxable, even if you have one or two rental properties in the State ofArizona.http://www.gilbertaz.gov/eservices/finance/pdf/CommResidRentalTax0610.pdf

• Phoenix 2.0% :A person who has three or more residential units rented or available for rent in the State of Arizona must pay tax to the City of Phoenix on the units located within the City. A property manager or broker who manages residential rental units must pay tax to the City of Phoenix on the units located within the City of Phoenix even if an individual owner would not be taxable. In this case, the property manageror broker may obtain the license and report the tax on the residential rental income for a property owner. Examples of residential rentals include: houses, apartments, manufactured homes, mobile home, (trailer) spaces. http://phoenix.gov/plt/resrent.pdf

• Scottsdale 1.65% A person who has three or more residential units rented or available for rent in the State of Arizona must pay tax to the City of Scottsdale on the units located within the City of Scottsdale. http://www.scottsdaleaz.gov/Assets/Public+Website/taxes/RentalPersProperty.pdf

Quick Refererence: Investments Abreviaitons

__________________________________________________________________________________________

AFD – Agreement For Deed

AITD – All Inclusive Trust Deed

APR – Annual Percentage Rate

ARM – Adjustable Rate Mortgage

ARV – After-Repaired Value

BOM – Back On Market

BOR – Board of Realtors

BPO – Broker’s Price Opinion

CAD – County Appraisal District

CAP – Capitalization

CCIM – Certified Commercial Investment Member

CCR – Conditions, Covenants, and Restrictions

CFD – Contract for Deed

CLTV – Combined Loan To Value

CMA – Comparative Market Analysis

COCR – Cash on Cash Return

COF – Cost of Funds

COO – Certificate of Occupancy

CRB – Certified Residential Broker

CRE – Creative Real Estate

CRS – Certified Residential Specialist

DBA – Doing Business As

DCR – Debt Coverage Ratio

DOS – Due On Sale Clause

DOT – Deed of Trust

DSCR – Debt Service Coverage Ratio

FCRA – Fair Credit Reporting Act

FFE – Furniture, Fixture, and Equipment

FHA – Federal Housing Administration

FHLMC – Federal Home Loan Mortgage Corporation, Freddie Mac

FMR – Fair Market Rent

FMV – Fair Market Value

FNMA – Federal National Mortage Association, Fannie Mae

FRBO – For Rent by Owner

FSBO – For Sale by Owner

GMAC – General Motors Acceptance Corporation

GRM – Gross Rent Multiplier

HELOC – Home Equity Line of Credit

HML – Hard Money Lender

HOA – Homeowners Association

HUD – Housing and Urban Development

HVAC – Heating, Ventilation and Air Conditioning

IRA – Individual Retirement Account

IRC – Internal Revenue Code

IRR – Internal Rate of Return

IRS – Internal Revenue Service

L/O – Lease Option

L/P – Lease Purchase

L/S – Landlord Seller

LIBOR – London Interbank Offering Rate

LLC – Limited Liability Company

LOC – Line of Credit

LOI – Letter of Intent

LP – Limited Partnership

LPOA – Limited Power of Attorney

LTV – Loan to Value

MAI – Member Appraisal Institute

MAO – Maximum Allowable Offer

MIP – Mortgage Insurance Premium

MLS – Multiple Listing Service

MUD – Municipal Utility District

NAR – National Association of Realtors

NIV – No Income Verification

NNN – Triple Net Lease

NOD – Notice of Default

NOI – Net Operating Income

NOO – Non-Owner Occupant

O/F – Owner Finance

OO – Owner Occupant

P&S – Purchase and Sale

PITI – Principal Interest Taxes Insurance

PMI – Private Mortgage Insurance

POA – Power of Attorney

PUD – Planned Unit Development

REI – Real Estate Investing / Real Estate Investor

REIA – Real Estate Investors Association

REIT – Real Estate Investment Trust

REO – Real Estate Owned

ROI – Return On Investment

RTO – Rent to Own

SFH – Single Family House

SFR – Single Family Residence

Sub2 – Buying property subject to existing financing

T/B – Tenant Buyer

TIL – Truth In Lending

TREC – Texas Real Estate Commission

UBIT – Unrelated Business Income Tax

UCC – Uniform Commercial Code

VA – Department of Veterans Affairs / Veterans Administration

Hello and thank you for visiting our website. We serve the Phoenix metro area. Below you will find all the city’s we service.

Mesa – Gilbert – Queen Creek – Avondale – Buckeye

Chandler – Gold Canyon – Tempe – Peoria – Litchfield

Phoenix – Apache Junction – Scottsdale – Cave Creek

Beware of Scams
Don‟t be a Victim

COMMON SCAMS
Don‟t be a Victim!
The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure ―rescue‖ companies claim they can help you save your home, but in reality they rarely do. Unfortunately, foreclosure fraudsters take your money, can ruin your credit and wipe out any equity you have in your home.

Your mortgage lender – or any HUD-Approved Housing Counseling Agency – can help you find real options to avoid foreclosure, and at no cost. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation and experience.

Loan modification companies are similar to foreclosure ―rescue‖ firms and are now being marketed aggressively to borrowers who might be experiencing a hardship. In Arizona, they are not licensed or regulated and therefore not necessarily trained, knowledgeable or have the ability to deliver on their promise. Loan modification offers can look legitimate and some even replicate government agency websites or used forged letterhead resembling your lender. Anyone guaranteeing results or charging upfront fees to ―save your home‖ should be suspect. Call your lender directly using the phone number on your mortgage statement and seek free counseling help from a HUD-certified financial counselor.

Sample

RED FLAGS

• guarantees to stop the foreclosure process – no matter what your circumstances
• offers to make your loan more affordable and help you avoid foreclosure
• instructs you not to contact your lender, lawyer, or credit or housing counselor
• collects a fee before providing you with any services
• accepts payment only by cashier’s check or wire transfer
• encourages you to lease your home so you can buy it back over time
• tells you to make your mortgage payments directly to it, rather than your lender
• tells you to transfer your property deed or title to it
• offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
• offers to fill out paperwork for you pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand

Sample

How Scams Work

Foreclosure ―rescue‖ firms and loan modification companies are plentiful these days. Their goal is to make a quick profit, they will use half-truths, and outright lies to sell services that promise relief and then fail to deliver.

Potential victims are easy to find. Foreclosure ―rescue‖ professionals use a variety of tactics to find homeowners in distress from foreclosure postings in the newspaper and on the Internet or through public
files at local government offices. Other approaches include ads on the Internet, on television, or in the newspaper, posters on telephone poles and bus stops. They can also send out personalized letters to the homeowners and post signs in the neighborhood.

The scam artists use simple and straight-forward messages, like:

“Stop Foreclosure Now!”

“We guarantee to stop your foreclosure”

“Keep your Home. We know your home is scheduled to be sold. No Problem!”

“We have special relationships within many banks that can speed up case approvals”

“We Can Save Your Home. Guaranteed. Free Consultation”

“We stop foreclosures every day. Our team of professionals can stop yours this week!”

In reality, they cannot deliver or guarantee that you will be helped, and should be avoided. They encourage the homeowner to stop working with their lender, servicer and housing counseling agency and tell them they will take care of everything.

If you suspect a scam, contact the Arizona Attorney General’s Office (see ―Tool/Resources‖ section for the contact information).

Common Foreclosure Scams

Phony Counseling or Phantom Help — The ―rescuer‖ tells the borrower that he can negotiate a deal with the servicer to save the house if the borrower pays a fee first. Once the fee is paid, the rescuer takes off with the money and provides no assistance.

Lease or Buy-Back — Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted and the ―rescuer‖ walks off with most or all of the equity.

Bait and Switch — Homeowners believe they are signing documents for a new loan to make the mortgage current, but sign away their home and are left holding the mortgage on a home they no longer own.

Refinance Fraud — Beware of people posing as mortgage brokers or lenders and offering to refinance your loan so you can afford the payments. Con artists may trick you into signing over the ownership of your home by saying that you are signing documents for a new loan.

Bankruptcy Foreclosure — There are several scam attempts to abuse the bankruptcy laws. The bankruptcy process can be complicated and expensive and the results can have a negative effect on your credit for years to come. For example, the ―rescuer‖ may promise to negotiate with the lender or get a refinance on your behalf for an upfront fee. Instead, the scam artist takes the fee and files a bankruptcy case in your name—sometimes without your knowledge.

Equity Stripping — A buyer purchases the home for the amount of the late payments and flips the home for a quick profit.

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New fraudulent scams are continuously developing. Always call a non-profit HUD approved housing counseling agency or your servicer if you suspect an offer is too good or if you are asked to pay a fee for foreclosure prevention services

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How To Protect Yourself From Scams

• DON’T pay money to people who promise to work with your lender to modify your loan. Instead, contact the Arizona Foreclosure Prevention Helpline (1-877-448-1211) for a referral to a HUD Approved Housing Counseling Agency and receive free help.
• DO call your lender yourself. Your lender wants to hear from you and would likely be more willing to work with you than a foreclosure consultant.
• DON’T transfer or sign over the deed to your home as part of a foreclosure avoidance transaction. A deed should be signed over only if you intend to sell the home for a fair price.
• DON’T pay your mortgage payments to someone other than your lender or loan servicer, even if he/she promises to pass the payment on.
• DON’T sign any documents without reading and understanding them first, or contracts and documents that have blank spaces. Many homeowners think they are signing documents for a new loan to pay off their mortgage and they discover they have actually transferred ownership to the ―rescuer.
• DO consult an attorney, financial advisor or knowledgeable family member before signing any ―rescue documents.
• DO contact a U.S. Dept. of Housing & Urban Development (HUD) approved housing counseling agency who may be able to help you for no charge. For a referral to a housing counselor near you, call the Arizona Foreclosure Prevention Helpline (1-877-448-1211) or go to www.hud.gov/arizona.
• If it sounds too good to be true, it probably is. Trust your instincts and seek help. Reporting suspicious schemes helps prevent other from becoming victims

IF YOU SUSPECT A SCAM, CONTACT:

Arizona Attorney Generals Office

602-542-5763 / 520-628-6504

Outside Phoenix/Tucson Metro Area 1-800-352-8431

www.azag.gov

Federal Trade Commission

www.ftc.gov

or call toll-free, 1-877-FTC-HELP (1-877-382-4357);

Better Business Bureau 1-877-291-6222

www.bbb.org

Fraudulent foreclosure “rescue” professionals use “half-truths” and outright lies to sell services that promise relief and then fail to deliver.

More information on the latest rescue scams and the ways to protect yourself can be found at:

The Arizona Attorney General’s office at www.azag.gov

Don’t Borrow Trouble® Pima County website at www.dbtaz.org

Arizona Foreclosure Prevention Task Force website at www.azforeclosureprevention.org

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This Information was compiled by the Arizona Foreclosure Task Force www.azforeclosureprevention.org

Revised October 19,2009. pages 29-31 of the Arizona Foreclosure Information workbook.

Foreclosure Vs Short Sales

There is always options available for us but sometimes we lack the knowledge that we need to make a good informed decision. A foreclosure can be very devastating to our credit and our ability to purchase a home in the future compared to a Short Sale. There are many benefits to doing a short sale if you cannot afford your home because of lack of work, unemployment, medical issues, Change of location of employment ect… I can go on and on. Only you can decide whether a Shortsale Is the best option for you. Please review the short sale content provided in this website. It is located on the nav bar. Theirs is information out there that give good examples of the benefits and disadvantages on the topic of Foreclosure VS Shortsale. In this blog I will give you some examples the benefits of a short sale compared to a foreclosure. For example in a successful short sale you are eligible for a Fannie Mae, FHA VA or Conventional loan within 2-3 years. Under the HAFFA program you can receive up to 3 thousand in home relocation cost if you qualify. Your credit score can be lowered from 150 to even more than 300 points in a foreclosure. In a successful Short Sale it can be lowered as little as 50 points if you were current on mortgage. Not always the case but possible every case is different. Foreclosure could remain 10 years or more on public record. Short Sales are not reported on a credit report. As jobs become scarce many employers are using credit reports as a means to help qualify someone for employment and using their credit score as an example of how responsible this potential new employee might be to the company. This would be a perfect example of protecting your future and your position in trying to obtain job employment. In some cases someone having a security clearance will have their clearance revoked and even quite possibly their position terminated. A short sale is not reported on the credit report. So please review all the disadvantages of a foreclosure instead giving up. This doesn’t even take into the account of the more interest you will pay in your lifetime for having to do a foreclosure. It’s quite simple to explain. You give up and let yourself set get foreclosed. You suffer an above average credit rating loss on your credit report. Now you start this long process of rebuilding you credit. This will take make many many years. As you apply for credit cards or get re-evaluated on your existing you will find out that you are being quoted a higher interest rate. This is because your new credit score has shown you to be a higher risk. The higher risk you are to a creditor the more interest you will pay during the life of that credit until your credit scores reach a satisfactory rating and your foreclosure doesn’t show on your credit report. In a foreclosure as well as a short sale lenders do have the right to pursue a deficiency judgment against you, but in some successful short sales it is possible to convince the lender to give up the right to pursuit a deficiency judgment against the homeowner. Another benefit of a short sale using the HAFFA plan you may receive up to 3k in relocation money if you qualify. For easy reference I have included a summary below Please visit our CDPE Maryann’s website to see if you qualify (doiqualifyforhaffa.com) or give us a call and we will be glad to assist you.

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Summary

Foreclosure

In a foreclosure homeowners are ineligible for Fannie Mae, FHA, VA, Conventional loans for a period of 5 years.

Foreclosure can remain 10+ years on you public record.

In some cases someone having a security clearance will have their clearance revoked and even quite possibly their position terminated. Employers are checking their employee’s credit regularly. Employers are requiring credit reports with applications.

In a foreclosure lenders do have the right to pursue a deficiency judgment against you.

Short Sale

Can get a loan from Fannie Mae , VA, Conventional, FHA within 2-3 years

A short sale is not reported on a person’s credit report.

A short sale is not reported on a person’s credit report.

In a foreclosure as well as a short sale lenders do have the right to pursue a deficiency judgment against you, but in some successful short sales it is possible to convince the lender to give up the right to pursuit a deficiency judgment against the homeowner.

HAFA Requirements

Loan Eligibility Criteria for HAFA:

1. The loan must be secured by borrower’s principal residence (unless borrower had to relocate more than 100 miles away for employment reasons and have not purchased another property).
2. It must be a first lien mortgage originated prior to January 1, 2009.
3. The mortgage is delinquent or delinquency is reasonably foreseeable.
4. The unpaid principal balance is no more than $729,750, for a single-family residence (higher limits apply for 2-4 unit multi-family dwellings).
5. The borrower’s total monthly mortgage payment exceeds 31% of the borrower’s gross income.
6. After notification of potential HAFA eligibility, borrower has 14 days to ask for HAFA consideration.

HAFA Incentive Compensation:

• Borrowers: $3,000 (relocation assistance)
• Servicers: $1,500
• Investors: $2,000 (maximum reimbursement for payments to junior liens)
• Junior Liens: $6,000 (but can be no more than 6% of the unpaid principal balance)

All lien holders who agree to participate in the HAFA short sale must release the borrower from all deficiency liability if the HAFA short sale closes.

Borrowers are eligible for HAFA if they are eligible for the HAMP program, but:

1. Do not qualify for HAMP.
2. Fail to complete a HAMP modification.
3. Do not accept a HAMP loan modification

HAFA Short Sale Process:

1. If the borrower qualifies for HAFA, the servicer will send a Short Sale Agreement (SSA) to borrower, which is required to specify the minimum amount the lender must receive from the short sale.
2. The borrower has 14 days to return a signed SSA to servicer.
3. The listing period must be a minimum of 120 days and can be extended up to a maximum of one year.
4. When an offer is received, a Request for Approval of Short Sale (RASS) form must be submitted within three days, along with a copy of the offer and proof of funds for the buyer.
5. Servicers must accept or reject the offer within 10 days.
6. The buyer may not sell the property within 90 calendar days of closing of the short sale.
7. If an offer is received prior to a HAFA SSA being signed by the servicer and borrower, the borrower must submit an Alternative RASS form with the offer.

Testimonials

Jose is a very trustworthy and honest person. He is a hard worker and will give you the help that you may need for your particular situation. He is very knowledgeable about real estate and makes every effort to make you feel comfortable during your entire experience. He will look out for your needs and protect your interests. He will not only be your Realtor, but your friend.

Y. Ramon

I have had the pleasure of working with Jose Lamboglia on various real estate projects for a period of 4 years. I find his work ethics and professionalism to be impeccable. He is a “no nonsense, get the job done right the first time” thinker. When I began building my personal real estate team, it made sense to bring him on as a partner for his integrity and attention to detail is what we are all about. His presence and bright attitude brings a positive addition to our office. You will find him knowledgeable, integrious   and truly dedicated in the  area’s that are of most importance when it comes to choosing a  Realtor®. I am proud to work with him and you will be too!”

Mary Ann Chapman, Realtor®,  CDPE, My AZ short sale Homes West Team Leader