AZ Real Estate 05-18-2014

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AZ Real Estate REACH US

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CATHERINE REAGOR REAL ESTATE

Investors not looking at Phoenix

M SURVIVING the PROCESS Borrowers often find loan closing to be daunting Russ Wiles The Republic

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azcentral.com

Many Americans will buy a home at some point in their lives, and there’s a good chance owners will refinance their original mortgages. Yet these transactions are among the most complicated financial deals most Americas ever face — and they don’t always go smoothly. Confusing terms, last-minute surprises and a multitude of pages can make the closing or loanfinalization process challenging. “Consumers face a daunting package of closing documents that is too large to absorb and too difficult to understand,” said the federal Consumer Financial Protection Bureau in a new report. “This makes many consumers feel over-

whelmed and with little control over this important process.” Can you survive the mortgage-closing process? Here are some things to know.

There’s a lot to go over

A big problem with the closing process is that document packages sometimes approach 100 pages, if not more. A lot of the verbiage is boilerplate text, but there are many references to loan terms, customer names and property addresses that must be verified. The fact there are different stakeholders adds to the clutter. These include the lender, settlement agent, government regulators and investors who ultimately buy the loan. All these See CLOSING, Page R3

etro Phoenix no longer ranks as a top market for investors looking for inexpensive houses to turn into rentals. The number of investors buying houses in the Valley has been falling steadily since 2012, when prices began to soar and foreclosures plummeted. In March, about 17 percent of all home sales were investor-driven, according to Arizona State University’s W.P. Carey School of Business. That’s less than half the number of investor purchases during 2011, at the bottom of the housing crash. “The institutional investors are doing very little buying or selling in the Phoenix area at the moment,” said Mike Orr, real-estate analyst with ASU’s W.P. Carey School. “Their focus has turned to property management, rather than acquisition or disposal.” Home sales have slowed this year from 2013’s pace, but demand for rentals is strong. There were about 3,700 houses available to lease in early April, according to the Arizona Regional Multiple Listing Service. At the beginning of March, there were more than 4,100 houses available to rent. Most investors, particularly the big institutional buyers, paid cash for rentals during their buying frenzy. Many of those property owners are earning 10 percent to 20 percent on their investments now. But because sales prices are higher, the return rate for rental-home investments is down in metro Phoenix. The average gross yield on a Maricopa County rental purchased for $180,000 and rented out for about $1,400 a month is 9 percent, according to RealtyTrac, a national real-estate research company. Rental houses in Pinal County are yielding returns of about 13 percent because sales prices are lower, but the See REAGOR, Page R3

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