Foreclosures.com Predicts Increased Foreclosure Activity in Phoenix Metro

Business Wire, Nov 11, 2002

Business Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 11, 2002

Despite growth in the nation's economy of 3.1% in the third quarter of 2002, Foreclosures.com, a Sacramento, Calif. based foreclosure property investment advisory firm and publisher of pre-foreclosure data, sees increasing foreclosure activity coming in the Phoenix, AZ metropolitan area.

"Persistent unemployment in Maricopa County coupled with a slowdown in the local housing market," said Foreclosures.com president Alexis McGee, "will tighten the squeeze on troubled borrowers trying to keep their homes." Ms. McGee pointed out that in a hot housing market, rapid price appreciation enabled homeowners in default to easily refinance or sell their way out of a bind. "Until now", said Ms. McGee, "Phoenix certainly has been hot. Existing homes appreciated by 9% so far this year, but there are signs that this won't continue."

Among indicators of a cooling market is a 20% increase in homes listed for sale (by a real estate agent) in the Phoenix area as reported by the Arizona Multiple Listing Service. Also, the time on the market before a house sells has increased by two weeks year over year from 2001, and prices in the high end of the market have actually come down. Ms. McGee said that the combination of these factors means growing pressure on prices.

"A leveling off of home prices combined with unemployment that just won't go away," says Ms. McGee, "means that the homeowner in trouble has fewer options. Lenders hesitate to renegotiate loan terms or refinancing with an unemployed or underemployed borrower, so while he or she may have equity, that equity can't be leveraged to cure a default." This may leave a quick sale at a discount from fair market value as the only way to avoid foreclosure, Ms. McGee added.

Foreclosures.com has been publishing pre-foreclosure data and advising distressed property investors in California for more than a decade. The firm recently expanded its service to the Phoenix AZ, Chicago, and New York City metro areas as well as to all 21 counties of New Jersey. The firm's products and services are available at its website www.foreclosures.com.

"Our mission," says Ms. McGee, "has always been to help investors locate homeowners facing foreclosure so they can conserve some equity for a new start, rather than lose everything at a foreclosure auction."