The U.S. economy is not only negatively affecting families and their homes, now it is increasingly hurting businesses and commercial properties. Over the last few months, Default Research has seen a significant increase in non-residential properties entering our lists, and also much greater interest from our clients about investing in these former store fronts. Particularly, commercial property foreclosures have began to increase, and from January 2009 to February 2009, Default Research saw commercial property foreclosures increase 35% percent.

The savvy clients we have are ahead of the curve by realizing that commercial properties also present a "buy low and sell high" opportunity when the economy does recover. You can learn a lot more about the chance to snatch up one of these commercial investments in an article inside this month's newsletter. Also, brush up on your foreclosure rule book and read about the difference between judicial and non-judicial foreclosures. Finally, in my article about the top five reasons why the foreclosure crisis is coming to an end, I ask you to help by submitting examples of how the economy is recovering in your area. There are lots of chances being offered up to our clients, from commercial properties to speaking your mind — I can't wait to hear all of the positive news!

Arizona Foreclosure Law Summary

There are two methods of foreclosure in the state of Arizona; Judicial Foreclosure and Non- Judicial Foreclosure. Here we will focus on the primary method of foreclosure — Non-Judicial.

In a non-judicial foreclosure in Arizona, a Notice of Trustee Sale is filed with the county recorder's office and a date and time of the sale is set. This notice states that the home is to be sold no sooner than 90 days from the date of the recording of the notice in the courthouse. It is the Trustee's responsibility to mail a notice within five days of the recorded Notice of Trustee Sale to the homeowner and anyone else who may be affected by the foreclosure. Prior to the Trustee Sale, the homeowner, who is still responsible for the property, has a few options available. He or she could make the late payments, sell the home, refinance, or file bankruptcy.

The State of Arizona has the Right of Redemption; a last chance for the homeowner to bring the loan current and stop the foreclosure process. This last chance for reinstatement of the loan occurs up to one day prior to the Trustee Sale. Terms for redemption are worked out between the lender and the homeowner. These terms usually require that the homeowner pay the late payments, as well as late fees, other lender's fees, and attorney's fees.

If the lender and the homeowner cannot come to terms, the home will be sold at auction to the highest bidder. Proceeds go first to pay off the primary lien, then any secondary liens. At this time, the homeowner's rights and responsibilities to the property have ended.

On the Bubble of Recovery

Foreclosures have been a hot topic since 2006 when the housing market peaked. For the past two years, the news has been packed with negative stories about the housing situation in America. Most people are aware of the situation we are in, but not a lot know how we got into this major mess.

The first reason is that, as home prices inflated, people began to refinance their homes. They then used their homes as if they were ATM's and withdrew hundreds of thousands of dollars from their home's alleged worth. Much of this was done using adjustable rate mortgages and teaser rate loans. Many homeowner also believed that their homes would continue to appreciate and that they could then refinance again and get even more money out of it. However, in late 2006, home prices stopped appreciating and the buying frenzy was over! Housing inventories began to increase while prices began to drop. To compound the problem, many of those who bought or refinanced had interest rate adjustments on their homes and this lead to increased payments they could not make.

The second biggest problem was the investors who sprung up all over the country. Due to the dramatic increase in home values in Arizona, California, Florida and Nevada, investors saw a chance to make a quick buck in the real estate market by flipping homes. Properties were on the market for a few hours before being bought up and, in some cases, investors were knocking on doors of homes that weren't even for sale and making offers. Talk about fuel for the inflation of the housing bubble!

The third reason that got us into the foreclosure crisis is still up for debate. Some people argue that lenders played a big role in the problem As a close friend said to me, there are three essentials to life: food, water, and someone to blame. The homebuyer is ultimately responsible for what he/she borrows, not the lender. The blame for these ridiculously high mortgages, in the end, is the responsibility and problem of the buyer who has borrowed unrealistically, lied about their income, or did not read their mortgage terms to fully understand what they were undertaking.

Even though the media likes to focus their energy on talking about how dismal everything is, including the housing market, the housing crisis is coming to an end.

Now for the good news and the improving situation! Currently we are seeing declines or stabilization of foreclosure rates in many regions. Furthermore, housing inventories are beginning to decline while median prices level off. In many regions it is now cheaper to buy a home than it is to rent, and interest rates are at an all time low. Currently homes are undervalued, and with homeownership being cheaper than renting in many areas, markets are beginning to turn. Many of our clients who are real estate professionals have commented on a dramatic increase in buyer activity in the past 30 days.

However, continued dismal news constantly being fed through the media may be hindering things. And that brings me to the final point. Until the unemployment situation can be improved in this country, there will be foreclosures. Actually, unemployment is not mentioned in this article because we are focusing specifically on the "housing bubble" which was an over-inflation of real estate based on the various factors noted above. The unemployment issue came after the housing bubble burst and is, therefore, a separate matter for another article. So, stay tuned!

What is the MOST IMPORTANT MOMENT in a real estate investor's life? It is the 30 to 60 minutes you are with a potential seller trying to get them to sell at a 20% to 50% discount to their homes value!

"Imagine Being Able to Consistently Get Seller's To Sell At A 20% to 50% Discount!"

Wonder if this is possible? It is if you are totally prepared and have a well- done professional presentation during that critical moment.

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S. California Foreclosures Drop Over 3 Percent In February 2009

Mt. Pleasant, PA — Default Research, the premier provider of preforeclosure real estate data in Southern California, is reporting that Notice of Defaults and Notice of Trustee Sales recorded in Southern California dropped 3.54 percent from February 2008 to February 2009. For more detailed Southern California area foreclosure statistics listed by county, please visitmarket.defaultresearch.com.

Housing indicators show a continued decrease in home inventories while median home prices are beginning to level out," said Serdar Bankaci, founder of Default Research. "With the full effects of the multiple stimulus packages, along with the president's new Mortgage Modification plan, we may begin to have some hope for the housing market."

According to Default Research, approximately 4.98 percent of Southern California households entered into some stage of foreclosure in the past 12 months in the region. The two hardest hit areas in Southern California remain Riverside County with 10.49 percent of homes entering into foreclosure followed closely by the Inland Empire's San Bernardino County at 9.35 percent. The nation's largest county, Los Angeles, saw 3.61 percent of households enter into foreclosure in the last 12 months.

"With California's unemployment rate at 10.1 percent, which is well above the national average of 7.6 percent, we may still see more people lose their homes," said Bankaci, whose daily pre foreclosure lists, which also include commercial properties, are e-mailed directly to real estate professionals in the region.

With the jobless rate spiking and consumer spending down, businesses are being forced to close as Default Research is beginning to see more non-residential foreclosures occurring, including both commercial and retail buildings. In fact, the number of commercial foreclosures in the Default Research coverage areas increased approximately 35 percent from January 2009 to February 2009.

Bankaci explained that when the commercial loans are due, property owners are unable to refinance, and that is contributing to the commercial foreclosure increase. However, the new commercial properties present a new avenue for the savvy Default Research clients to explore.

"Although banks may not be lending money now, private equity may come into play when financing commercial projects," said Bankaci. "Many experts predict that, with the hefty economic stimulus plans going into effect, consumer confidence will begin to rise again in late 2009 and 2010. This, in turn, would result in more businesses opening and commercial properties increasing in value."

Below is a unique and accurate local look at how the Default Research foreclosure statistics (February 2009) affect your area:

Los Angeles Foreclosures — Hardest hit cities are Los Angeles (1537), San Jose (906), Palmdale (561), Lancaster (540), Long Beach (353), Vallejo (278) and Oakland (252)

Orange County Foreclosures—Hardest hit cities are Santa Ana (349), Anaheim (297), Garden Grove (133), Huntington Beach (116), Orange (111)

Riverside Foreclosures—Hardest hit cities are Riverside (799), Moreno Valley (650), Corona (613), Murrieta (408), Perris (354) and Hemet (309)

San Bernardino Foreclosures — Hardest hit cities are Fontana (631), San Bernardino (569), Victorville (495), Hesperia (350) and Ontario (310)

San Diego Foreclosures—Hardest hit cities San Diego (1269), Chula Vista (474), Escondido (296), Oceanside (254) and El Cajon (160)