New round of Tucson foreclosures looks likely

Experts: Strapped homeowners now are running out of options
2013-05-10T00:00:00Z 2013-05-10T14:40:34Z New round of Tucson foreclosures looks likelyThe Associated Press The Associated Press
May 10, 2013 12:00 am  • 

A new wave of foreclosures could be on the horizon in the Tucson area, local mortgage counselors say.

Although the news about the housing industry's recovery has been upbeat and foreclosures have declined in recent months, those numbers could rise this year until jobs return and wages increase in Pima County.

A new type of distressed homeowner is showing up at foreclosure prevention clinics - those who have held on for the past couple of years but reduced work hours or loss of benefits has caught up with them.

"These are people who managed to stave off foreclosure but have now exhausted their savings," said Ellen Hull, assistant director of the Administration of Resources and Choices, which offers foreclosure-prevention counseling.

She said recent workshops for distressed homeowners have had higher attendance than usual.

"The numbers may look a certain way, but when you're dealing with Tucson and its high unemployment, that's another set of numbers that we guide our operations by," Hull said.

National and local data show a significant drop in foreclosures.

Figures released by RealtyTrac Thursday show last month's foreclosures were at a 74-month low nationwide. In Pima County, there were 295 foreclosures in April, compared to 431 in April 2012 and 650 in April 2011, records from the Pima County Recorder's Office show.

Hull said the Tucson housing crisis has reached those who are current on their mortgage but, following a layoff, have taken lower-paying jobs or ones without benefits and now face mounting medical bills.

"Everyone tried as best they could to avoid foreclosure," she said. "The dust is still settling."

For that reason, Hull said, she doesn't share the enthusiasm of some analysts that the worst is behind us.

"I don't yet, only because of where we are," she said. "I'm looking at the long term. Once I see better jobs coming to Tucson, I'll share the enthusiasm."

Unemployment in Pima County is around 7 percent.

New figures from the state Department of Administration forecast Pima County adding just 3,000 jobs this year, compared with 5,300 new jobs in 2012.

The 2013 edition of Star 200 - an annual survey of Southern Arizona's largest employers - showed employment increased 0.7 percent in 2012.

"We're still seeing the same number of people coming through needing our services," said Lydia Ramirez, program coordinator for foreclosure prevention at the Pio Decimo Center. "It's sad. Most of it has to do with unemployment."

Like Hull, Ramirez said she's seeing a lot of people who have been "hanging on by a thread" for the past few years who can no longer afford their mortgage.

"Because of their reduced hours and lower pay they don't qualify for a loan modification because they don't earn enough," she said.

As long as a homeowner is working with a counselor, foreclosure proceedings are postponed, Ramirez said.

"That's why I believe the numbers will increase this year," she said.

The number of people seeking help through The Primavera Foundation has been steady, said Oscar Gastelum, a foreclosure intervention counselor.

"The stories are the same. Nothing's changed," he said. "Unemployment, underemployment, medical bills."

And there isn't always a solution.

"Sometimes there are no options available," Gastelum said. "Sometimes we just prepare them for the worst and for life after."

Most such clients will end up moving in with relatives, he said.

Gloria Vasquez, director of the homeownership program at Primavera, said there's a two-month waiting list for emergency housing.

The one bit of good news all the agencies report is that the distressed loans are not new ones. They were all generated during the housing bubble.

Counselors advise homeowners to seek help as soon as it's obvious that they are in trouble and not to wait until a foreclosure notice has arrived.

Where to get help

Several agencies offer free counseling for homeowners trying to avoid foreclosure. Among them:

• The Administration of Resources and Choices (ARC) holds regular workshops. The next meeting is Tuesday at 4:30 p.m. at the Community Food Bank, 3003 S. Country Club Road. RSVP to 623-9383.

• Pio Decimo Center will have a foreclosure-prevention workshop Tuesday at 2 p.m. at its office, 848 S. Seventh Ave. RSVP to 624-0551, extension 119.

• The Primavera Foundation has a weekly workshop Thursdays at 4 p.m. at 151 W. 40th St. RSVP to 882-5383.

Bill would alert tenants to looming foreclosure

PHOENIX - The Arizona Senate has joined the House in giving final approval to a bill requiring landlords to notify tenants when their property enters foreclosure.

House Bill 2281 would amend the Arizona Residential Landlord and Tenant Act to require the owner to provide written notice to tenants within 5 business days of receiving a notice of trustee's sale. The law currently only requires notice if a provision was in the lease.

The bill is sponsored by Rep. Steve Smith of Maricopa. He says renters complained landlords gave them no notice before they were told they must move because of a foreclosure.

The House voted 54-2 to pass the bill last month. The bill passed the Senate on a 28-0 vote Thursday. It now goes to Gov. Jan Brewer for consideration.

Contact reporter Gabriela Rico at grico@azstarnet.com or 573-4232.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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