It was recently announced (courtesy of the Mortgage Asset Research Institute) that Arizona is the fourth ranked state for mortgage fraud. The state follows Florida, New York and California. Mortgage fraud is of serious interest to buyers, sellers and lenders, because statistics like these directly and indirectly influence prices in the market. We recently learned that Phoenix, AZ real estate prices went up in 2009 and 2010. Is this fact related only to fewer foreclosure rates, or might this trend have something to do with the increase in fraud?
The important question is, how should this news item affect you, the honest homeowner looking for a good deal in Scottsdale real estate? Interestingly, a majority of fraud cases are only brought out in the open by the time the home is foreclosed. This should inspire honest and hardworking homeowners to look into foreclosure homes, bank owned REO properties and short sales. Scottsdale foreclosure homes sometimes have a bad reputation because of preconceived notions that homeowners were heartlessly evicted.
This is not always the case. Not only are some cases proven to be fraudulent, but you also have to stop and think of homeowners that wanted to be released from the contract. Why would this happen? Simply put, many, many homeowners would rather deal with a foreclosure item on their credit than continue to pay the outstanding balance—if it is greater than the market value of the house. What about consumers that negotiated with the lender and came to a short sale agreement?
Last but not least, what about Scottsdale bank owned homes? These homes are foreclosed for a variety of reasons. Unlike foreclosure sale properties, these properties are repossessed by the bank and repaired and made livable. They are also sold for prices less than the cost of full market value, and in some cases, even less than foreclosure price.
Remember, you always have the right to investigate the home in question. Make an informed and educated choice, based on the facts you learn.