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Arizona Foreclosure Process…One Family’s Story

It’s a sad reality…but one that many families in Arizona are facing. Foreclosure. It’s scary. It comes with a great degree of uncertainty. And…to further complicate the issue…the experience can vary from person to person and bank to bank.
I can only tell you what I have personally observed.

I will call my “fictional” family the Smith Family. Mr. Smith was out of work for over a year and they fell behind on their mortgage. Mrs. Smith had a good job but did not bring in enough money to cover all of their monthly expenses. When Mr. Smith did find a job he was not making as much money as he was in his prior position. They fell further behind in their mortgage payments.

After trying for a loan modification which did not work out…they called me  hoping to get the home sold on a short sale. If you are not familiar with how the short sale process works please read this blog detailing a short sale. After about ten weeks the bank finally approved the short sale. Sadly, when the buyers were told that they were free to move forward and proceed with the purchase they had changed their minds and decided to NOT move forward. By this time we were up against a foreclosure date within ten days. We tried to procure another buyer but in that short time were unable to do so. The bank would not extend the date without a viable offer and proceeded with the foreclosure.

The Smith’s were understandably upset and very scared. We had already talked about the potential of this very thing happening and had located a suitable rental property. The problem was that the home was occupied and it would be a couple of weeks before the Smiths could take possession.

In this particular situation the investor (actual owner of the home) was FANNIE MAE. The home was purchased at the trustee sale by the bank and they then hired a Realtor to check out the property and see if it was occupied, what condition it appeared to be in…and so on.

So, two days after the foreclosure date the Smiths got a knock on the door from the Realtor. They were asked if they were aware the foreclosure had happened to which they replied they were. They were then asked if they had plans to move. Mr. Smith told the agent that they indeed did have a place to move to but it would not be available for another two weeks.

The agent said that he was authorized to offer them $2090.00 if they would be out within two weeks and leave the property in “broom swept’ condition. They took this to mean that they need to remove all the debris and personal property and sweep the floors.

The day before their two week deadline they were moved and had turned the utilities off. I accompanied them to the meeting with the REO agent as I was interested to see the process. The agent was very nice and sympathetic. He looked over the property and with the exception of a pile of bricks on the side of the house which they had failed to move…he was pleased. They agreed to move the bricks and loaded them up then and there.

While they were doing this I spoke to the agent and asked him a few questions. He explained his experience with FANNIE MAE has been this:

1. He visits the property a day or two after the bank has been through the trustee sale process and has officially foreclosed on the property. He shared with me that MORE THAN 50% of the time, if the owners are still occupying the property, they DO NOT KNOW IT HAS HAPPENED as they were working on a short sale or a loan modification.

2. If the (now former) owners are still in the home he visits with them about their plans and is able to offer them assistance with funds in order to help with moving expenses. This is typically NOT given to them at this time. He sets up the expectation of how the property needs to be left in order for FANNIE MAE to contribute moving funds. He tells them they need to leave attachments and built-in appliances, remove all trash and debris and leave the property in broom swept condition. he further explains there is somewhat of a sliding scale of payment. Roughly, it goes like this. Be out in two weeks and receive $2090.00. If it takes three weeks…the payment drops to around $1500.00. Between 3-4 weeks they still might agree to a small payment…but after four weeks they will proceed with forcible detainer action and the sheriff will move them if necessary. (as a side note…if the occupants are renting the property they are offered the opportunity to stay in the property with no deposits or credit checks…where FANNIE MAE is now their landlord)

3. He then calls them a day or two prior to the two week deadline and sets up a time to meet them and complete paperwork and inspect the property. If all is well he will submit a request for payment to FANNIE MAE. He explains that the check will take ten days to two weeks to process and will go to him. He then meets the former owners and delivers the check personally.

It was an interesting experience for me as I have not been involved in the REO listing side of the business as much as he has…so I learned a bit more about FANNIE MAE’s policy. I do want to state here however that if the owners loan is NOT owned by FANNIE MAE I have heard many different scenarios on the way they handle the process. Some may not off any assistance at all. Some folks claim they were offered assistance but never received the check. Still others I have heard of are still occupying the home and have not even been contacted by the bank or an agent!

We can only do the best we can do to help folks get past this with as less stress as possible…and get on with their lives!

If you are looking for a GREAT agent to help with your real estate needs please e-mail me atAdele@GreaterPhoenixHomes.com or give me a call (or text) at 602-504-3898 or 888-897-7821 x 114. Plus, I have a GREAT search tool on my web site that gives you the ability to search the entire MLS…just like agents do. Very COOL! ;) Go to Metro Phoenix Homes and check it out! YOU can create and save as many searches as you would like.

THIS IS THE BEST MOST ACCURATE SEARCH OF OUR LOCAL MLS WHERE YOU CAN SEARCH JUST LIKE AGENTS DO

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