Arizona law allows an HOA to foreclose after a year of missed payments, or if dues and fines reach $1,200. “That definitely seems extreme,” said Reimer. “I didn’t even know about that. I wasn’t aware. As far as I’m concerned, it says if you’re two weeks late you owe 15 more dollars.” Attorney Jonathan Dessaules represents several clients on the verge of losing their homes. He said the number of HOA foreclosures is on the rise, with many homeowners having no idea it was even possible. “Once the HOA starts the foreclosure process it is a train going 90 mph,” said Dessaules. “The only way it can stop is if a homeowner accurately guesses how much a court will award in attorney fees.” According to an Arizona Republic investigation, HOAs have begun foreclosure procedures with more than 3,000 homeowners since 2015. Arizona law allows an HOA to foreclose after a year of missed payments, or if dues and fines reach $1,200. Dessaules said the biggest problem is how quickly the amount of money a homeowner owes can multiply, to the point where saving your own house can cost tens of thousands of dollars. “If you’re looking at a couple thousand dollars in assessments,” said Dessaules, “it comes with baggage in the form of thousands of dollars in attorney’s fees, and fee collection fees of various labels and kinds, and that adds up.” Dessaules would like to see state lawmakers change existing HOA laws, so that late fees and attorney’s fees are not included in any foreclosure proceeding, making it easier for homeowners to balance their accounts and keep their property. HOA management companies have argued that the foreclosure process is a last resort, and the threat of foreclosure is often the only leverage they have to convince homeowners to pay thousands of dollars in delinquent debt.
Amazon is skewing the whole country’s retail sales data and likely behind last month’s drop
– The surprise 0.2% drop in August retail sales is being blamed on Hurricane Harvey and Amazon.
– The report had an unusual decline of 1.1% in nonstore retail sales, the bulk of which is internet shopping.
– Economists say that could be payback from the extra shopping that went on during Amazon’s Prime Day in July.
The surprise drop in August retail sales is being blamed on Hurricane Harvey and Amazon. Retail sales fell 0.2%, but without autos, sales were actually up 0.2% in August. Some of the 1.6% decline in auto sales was blamed on Harvey. But there was also a surprising dip in a category that rarely falls— online shopping. Nonstore retail sales, the bulk of which is internet shopping, fell 1.1%. “One possible, at least logical, explanation is that the 1.8% rise in July non-store retail sales was boosted by the July 11 Amazon Prime Day, so the apparent ensuing weakness is a return to a more normal sales activity post the Prime Day sales,” wrote Ward McCarthy, chief financial economist at Jefferies. He notes that nonstore sales were up 8% year over year even with the sharp August decline. Stephen Stanley, chief economist at Amherst Pierpont, also pointed to Amazon. He said details of July sales show that the sub category of internet shopping was up 2%, and probably the result of Amazon’s self-proclaimed one-day shopping holiday. Amazon has said its third annual Prime Day was its “biggest day ever,” with sales surpassing its 2016 Black Friday and Cyber Monday results. Prime Day sales grew by more than 60% from 2016.
Stanley also blamed Harvey for the drop in auto sales, which took a dip at the end of the month. Harvey also could have been partly to blame for some of the jump in gasoline sales, which were up 2.5%. Stanley said prices were already slightly higher in August ahead of the hurricane, which dumped unprecedented rainfall on the heart of the refining industry. Goldman Sachs economists, in a note, said Harvey likely added to sales declines in a number of discretionary categories—clothing, electronics and building materials. Sales for September should also show the impact of Irma, which hit Florida on Sunday and caused the evacuation of coastal towns in Florida and other parts of the Southeast. September could show more impact from storm preparations since residents had more time, ahead of Irma, which crashed through the Caribbean before slamming Florida. Harvey appeared fairly quickly, transforming rapidly from a tropical depression into a powerful hurricane. “In my numbers, I took half a% off of consumer spending in Q3 and added it back in to Q4,” Stanley said. “I think that’s broadly how I’m thinking about the hurricane effects. There will be ongoing impacts.”
Freddie mac suspends evictions, foreclosures in disaster areas
Freddie Mac will suspend all foreclosure sales and evictions through Dec. 31 in areas that the Federal Emergency Management Agency (FEMA) has declared eligible disaster areas as a result of hurricanes Harvey and Irma. Freddie Mac is working with servicers to ensure that no property inspection costs resulting directly from either Harvey or Irma are passed on to impacted borrowers. “We appreciate the understanding and consideration that servicers are extending to borrowers coping with hardships related to these devastating storms. As we continue to work with servicers to assess the damage, we want to reassure borrowers that we will support them during this difficult time,” Yvette Gilmore, Freddie Mac’s vice president of single-family servicer performance management, said in a statement. “They may be able to put their mortgage payments on hold for up to one year if their mortgage is owned or guaranteed by Freddie Mac. The first step is for borrowers to contact their mortgage servicers – the companies they send their payments to each month.” Borrowers can look up the telephone number and mailing address of their mortgage servicers on the Mortgage Bankers Association’s website.An eligible disaster area is an area comprised of counties or municipalities that have been declared by the president of the United States to be major disaster areas where federal aid in the form of individual assistance is being made available. A list of these areas can be found on FEMA’s website. These additional disaster relief assistance program changes are scheduled to be sent to Freddie Mac servicers in a guide bulletin that will be issued today. A description of Freddie Mac’s disaster relief policies can be found on the agency’s website.
Equifax needs a plan to stop investor exodus
Shares of credit reporting agency Equifax (EFX) have fallen more than 35% since the company announced a massive cyber-security breach that likely impacted all US adults, however the lack of transparency in the wake of the incident has done little to increase consumer or investor confidence in the company. “[The only way to] restore your good name … is facts, facts, facts, transparency,” Lanny Davis, a lawyer who specializes in crisis management and former special counsel to President Bill Clinton, told FOX Business. “That’s what the stock market is mostly about, it’s usually about the investors’ perception and right now, Equifax has not put out sufficient facts to cure the negative perception.” Davis, who is not familiar with the specifics of the case other than what he’s read in the media, says there are two key issues that remain unclarified in the wake of the breach: how Equifax plans to fully secure the systems that allowed the hack to take place and what the company is doing about the supposedly coincidental sale of nearly $2 million worth of company stock by three different executives after the breach was discovered on July 29. “Even if it was coincidental they have not put the facts out to explain why it was coincidental, at least enough for most people to understand. And perception is all about protecting reputation. It doesn’t matter what the facts are if the media is portraying this as suspicious,” Davis said. On Thursday, shares of Equifax touched their lowest level in more than 2.5 years. Davis said releasing the facts, even if they are unfavorable, will go a long way toward restoring public perception and therefore, investor confidence.
NAR – homeownership a common interest, deserves protection in tax reform debateTax reform done right could yield savings and simplification that benefits average Americans, but history shows that misguided reforms can pose significant threats to the economy. That’s the message the National Association of REALTORS brought to Congress today as Iona Harrison, chair of NAR’s Federal Taxation Committee, testified (link is external) before the Senate Finance Committee. At the hearing, titled “Individual Tax Reform,” Harrison told senators that putting homeownership in the crosshairs of tax reform would strike at millions of American households. “Real estate is the most widely held category of assets that American families own, and for many Americans, it’s the largest portion of their family’s net worth,” Harrison said. “As 64% of American households are owner-occupied, we believe that homeownership is not a special interest, but is rather a common interest.” Over the past year, proposals for tax reform have included the elimination of important benefits like the state and local tax deduction, a near doubling of the standard deduction – which would all but nullify the benefits of the mortgage interest deduction – as well as caps to the MID.REALTORS® have warned lawmakers that proposals to limit or nullify the tax incentives for homeownership could actually raise taxes on millions of middle class homeowners while putting the value of their homes at risk. In her testimony, Harrison responded to critics of real estate deductions, who often claim those deductions benefit only a small number of wealthy individuals.
– 70% of the value of real property tax deductions in 2014 went to taxpayers with incomes less than $200,000;
– 53% of individuals claiming the itemized deduction for real estate taxes in 2014 earned less than $100,000;
– 32.7 million tax filers claimed a deduction for mortgage interest in 2015;
– Half of taxpayers with mortgages over $500,000 have AGI below $200,000., according to research conducted for NAR.
– To that end, Harrison reminded the committee that tax reform efforts in the late 1980’s were fraught with unintended consequences that delivered a broadside to the economy and only offered brief tax relief.
“When Congress last undertook major tax reform in 1986, it eliminated or significantly changed a large swath of tax provisions, including major real estate provisions, in order to lower rates, only to increase those rates just five years later in 1991,” said Harrison. “Most of the eliminated tax provisions never returned and in the case of real estate, a major recession followed.” Despite the REALTORS®’ concerns raised during the hearing, Harrison reminded Senators that REALTORS® do support tax reform. “Homeowners already pay 83% of all federal income taxes, and reform that raises their taxes is a failed effort,” said Harrison. “But NAR supports the goals of simplification and structural improvements for the tax system, and individual tax rates should be as low as possible while still providing for a balanced fiscal policy. We simply believe that to achieve these goals, Congress should commit first to doing no harm to the common interest that homeownership provides.”