Foreclosure sales dominate Valley

Foreclosure sales dominate Valley

by Catherine Reagor The Arizona Republic Mar. 31, 2010 12:00 AM

Foreclosures continue to drive indicators and much of the news about the Phoenix housing market.

• Homebuilding and new-home sales remain near historic lows due to the many foreclosure homes being resold. In February, there were 532 new houses sold in the Valley, according to the "Phoenix Housing Market Letter." That compares with 713 sales a year earlier.

It's still difficult for some homebuilders to compete with the low prices that lenders are selling foreclosure homes for now. The gap in new-home and existing-home prices and sales is wider than it has been since the early 1990s.

• After posting month-to-month home-price increases during the last part of 2009, Phoenix is in the negative again on the latest S&P Case-Shiller home-price index.

The lagging index
, released Tuesday, shows Phoenix home prices fell 0.06 percent from December to January. The decline comes after the metro area posted a 0.05 percent increase from November to December.

But Phoenix isn't leading the nation in home-price declines. Case-Shiller reports the area's home prices fell 4.6 percent during 2009. Las Vegas posted a 17.4 percent plummet in prices for the year. Tampa and Detroit each saw home prices drop more than 7 percent.

• Arizona is receiving more federal aid due to its foreclosure crisis. It's one of five states divvying up $1.5 billion in additional federal funds to slow foreclosures. Arizona's share is $125 million, and the state is charged with creating its own plan to spend the money.

The Arizona Department of Housing is holding a public meeting next Wednesday to discuss its proposed program for spending the money to help the many residents facing foreclosure.

The meeting will be held at 1 p.m. at Phoenix's Carnegie Library. Seating is limited, so anyone who wants to attend should contact the Housing Department to reserve a spot.

• Arizona is also receiving additional funds to help fight mortgage fraud, which has led to many foreclosures. U.S. Attorney General Eric Holder was in Phoenix on Thursday and pledged $1.7 million to help fight mortgage fraud in Arizona.

On Friday, three men tied to a cash-back fraud scheme that involved several homes in Chandler, Gilbert and Queen Creek and $6 million in mortgages received prison sentences.

Jeffrey Todd Crandell, 32, of Gilbert, was sentenced to 62 months in prison. According to the U.S. attorney of Arizona, Crandell obtained properties, then hid his interest in those homes by putting them in other people's names. Then, Crandell recruited friends to buy the properties for inflated prices.

Crandell brokered the mortgages for the deals and included inflated incomes for the buyers on the loan applications. When the loans closed, Crandell supplied the down payment on behalf of the buyers and provided a cash kickback to them. The homes were later foreclosed on.

Jake David Abegg Whitman, 33, of Gilbert, was sentenced to 10 months for his part in the scheme, and Frederic Charles Crum, 37, of Gilbert, received a four-month jail sentence. A remaining defendant, Erin Michelle Leastman, 28, of Gilbert, is scheduled to be sentenced in April. She was the escrow agent on most of the deals.