Short Sale Nightmare - Renter’s Beware

By
Real Estate Agent with wexzilla.com

Everyone knows that Phoenix, AZ, Scottsdale, Peoria, Tempe, etc... saw real estate prices more than double from 2000-2005.  Real Estate Investors flocked to this real estate ‘gold rush' from all over the country, Canada and abroad.

Fueling the Phoenix real estate investor frenzy was an era of (too) easy lending and (virtually) free money. Top that off with low fixed mortgage interest rates and so-called "NINJA" loans (No Income, No Job, No Asset Verification) loan and every person with a 600 credit score becoming a real estate investor in Phoenix, Scottsdale, Mesa, etc...Short Sale Nightmare - Phoenix Renter's Beware

Phoenix area Real Estate investors hoped to either ‘fix & flip‘ he homes for a quick profit or turned them into rental properties using the rental income to pay for a majority of the monthly monthly fixed rate mortgage or adjustable rate mortgage.

As we all know, real estate in Phoenix, Fountain Hills, Gilbert, Mesa and Chandler has declined sharply. As a result, towns like Tempe, Glendale, Scottsdale, North Scottsdale and even Paradise Valley  are experiencing short sales, lender owned homes (REO) and foreclosures.

The result of the Phoenix area real estate collapse has been a series of short sale nightmares.

A new short sale nightmare in Phoenix is arising as a result of the Phoenix real estate crisis.  As we know, Phoenix, AZ  homeowners are having difficulty or no success in selling homes.  Now, homeowners are making the conscious decision to walk-away from their homes in Scottsdale, Phoenix, Peoria homes and decide to no longer pay their mortgage.

They are facing a short sale, so "why pay??" they ask themselves.

The problem is that they are not telling their tenants. Phoenix area homeowners are keeping the monthly rent (minimum 90 day foreclosure process) and not paying the mortgage. Also, in many cases, the owners are keeping the damage deposit and not returning it to their tenants.

I am hearing story after story of good paying renters coming home to foreclosure notices on their doors with no return phone calls from the landlord. Other tales of water being turned off at the city as those utilities are often paid by the landlord.

I was told a story about a Scottsdale resident who arrived home from work to find an eviction notice from the bank demanding they move out immediately. The nice couple had to take days off work, pack their belongings, hire and pay for movers and deplete their savings to pay for first, last month rent and damage deposit on a new apartment.

The worst part of all of these short sale nightmares is that there is little renters can do. The current law does not require that rental monies be paid toward the mortgage or returned to the renter.

Due to the conditions present in today's Phoenix area real estate market, this needs to change to protect tenants and to expand tenants rights in Phoenix and the rest of Maricopa County.

Contact your local Congressman and let your voice be heard.

____________________________________________

Copyright © James Wexler * Short Sale Nightmare - Phoenix Renter's Beware*

Contact James Wexler (480) 221-8080 for your Phoenix | Scottsdale area Real Estate needs

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Rainmaker
142,381
Cristal Drake
Realtor - Fullerton Real Estate
Prudential California Realty

We are starting to hear similar situations here in So. Cal. too.  Good post, something needs to be done for renters rights!

December 01, 2008 07:17 PM
Rainer
207,933
James Wexler
wexzilla.com

Bob & Caroline - sad story, and becoming more common, with foreclosure getting the news due tohe effect on the economy, there is only a little light on these sad stories

December 02, 2008 10:03 AM
Rainer
207,933
James Wexler
wexzilla.com

Jon , thanks for the note, and I am not familiar with the firm , www.therealestatepro.net , but i dont mind the shameless self-promotion

December 02, 2008 10:04 AM
Rainer
207,933
James Wexler
wexzilla.com

Gail Robinson - unfortunately banks do not honor leases, otherwise, the owner could 'lease' the home for lets say 2 years at $500/month to a so-called 'Friend' . and then when foreclosed upon, the bank would have to honor the lease

 

 

December 03, 2008 10:31 AM
Rainmaker
74,643
Michelle M. Tucker
Hunter Army Airfield Savannah Real Estate
!Daley Real Estate

James: WOW.  It is sad to hear that people would be so dishonest.  What comes around goes around, hopefully those cheating landlords, get ripped of when they go to rent.  Any ideas on how a proprety management department can be proactive on this?  Is it legal to request a yealy mortgage update? 

Congrats on the featured post. 

December 20, 2008 12:00 AM
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Rainer
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James Wexler

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rants, ravings, musings and market commentary Scottsdale|Greater Phoenix Real estate