Arizona Borrowers Still Underwater

CoreLogic® released new data showing that 11.4 million people, or 23.7% of all residential borrowers, were underwater at the end of the first quarter of 2012. In Arizona 561,097 people, or 43.4% of residential borrowers, were underwater. Arizona's negative equity peaked in the fourth quarter of 2009 when 53.7% of borrowers were underwater. Although Arizona's negative equity is dropping, it's rate is still almost twice that of the national average.

Housing Counselors' Less Traveled Road

Not long ago, the road traveled by housing counselors and their clients "diverged in a yellow wood". Before the housing crisis and economic meltdown in Arizona, housing counselors helped families find their way to homeownership. The families learned the tools to become responsible borrowers and homeowners. The road to homeownership was smoothly paved with successful events culminating in the joyful purchase of a first home.  Now housing counselors have become foreclosure specialists, helping homeowners to save their homes. The road to foreclosure prevention is bumpy, filled with potholes of frustration, and ever-shifting  requirements and products. Counselors now must be part financials experts/part social workers, as they help people in the most dire of situations, steps away from homelessness.   Most housing counselors in Arizona work for small nonprofits struggling to stay afloat. In the past month, two housing counseling agencies have been forced to close their doors.  It's time to value our housing counselors and give them the resources they need to ensure their sustainability. In the future, Arizona will need housing counselors that can help families navigate both roads, the bumpy road to foreclosure prevention and the smoother road to homeownership.  Housing counselors were forced to take the road less traveled by, but they have made all the difference.

Mortgage settlement funds can't come soon enough!

RealtyTrac's March 2012 Foreclosure Rate Heat Map shows that Arizona had the highest foreclosure rate in the country last month. There were 9,497 foreclosure filings in Arizona in March 2012. This means 1 in every 300 homeowners received a foreclosure filing last month, more than twice the national average of 1 in every 662 homeowners.

The Arizona Attorney General's office will soon receive almost $98 million as part of the $25 billion settlement reached with the 5 largest banks and 49 state's Attorneys' Generals. The agreement settles state and federal investigations finding that the country’s five largest loan servicers engaged in unacceptable and sometimes fraudulent mortgage servicing and foreclosure practices. Arizona's settlement stipulates that the funds should be used for foreclosure prevention and mitigation programs. 

Until we solve our foreclosure problem, Arizona will not see economic recovery. 

The settlement funds can't come soon enough. 

Arizona's Shrinking Supply of Housing for Lowest Income Renters

Arizona is the second worst state for providing affordable housing available for our lowest income families and seniors. 

 

According to a recent report by the National Low Income Housing Coalition, The Shrinking Supply of Affordable Housing, Arizona has only 20 affordable units available for every 100 extremely low income renters. That's below the national average of 30 affordable units available for every 100 extremely low income renters.

 

Nevada is the only state doing a worse job providing affordable housing for its poorest renters. Our similar foreclosure crises are wrecking havoc not only on homeowners but also trickling down to renters most in need.

 

Some of the affordable units are occupied by higher income renters, many who recently lost their homes to foreclosure. Other reasons these affordable units may not be available are that some may be in poor condition, or too far from jobs and public transportation. 

 

One consequence of this housing mismatch is that the vast majority of extremely low inome households spend excessive portions of their limited income on rent and utility costs, leaving little, if any, to spend back into the economy. These households are also the most vulnerable to becoming homeless if their income goes down or they have unexpected expenses. 

 

This report counters the perception that the foreclosure crisis and plunging home values have resolved the shortage of affordable housing in Arizona. In fact, the supply of affordable housing for our lowest income renters has actually shrunk.