Today, President Obama, unveils the Homeowner Affordability and Stabilization Plan in Mesa, AZ. Mesa and the entire Phoenix metropolitan area is experiencing rapidly deteriorating home values and high rates of home foreclosures.
The chart below shows the monthly median home price trend for Phoenix Metro over the past six years. The median home prices in Phoenix have fallen 40% from a high of $275,000 in May 2006 to roughly $179,000 in December 2008.
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The report below describes conventional purchase money mortgage data for Phoenix Metro for years 2005 and 2006. These two years cover the time period of irrational exuberance in real estate.
Notice that more than one-third of the purchase money mortgages had loan-to-value (LTV) ratios above 85 percent. Also note the average purchase mortgage in Phoenix Metro for those years ($237,954) is significantly higher than current median home price values ($179,000). These statistics provide hard evidence of how vast the "home owners are under water" problem is in Phoenix. Many more homeowners obtained piggy back home purchase mortgages and cash out refinance mortgages, making a bad problem worse.
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The report above on conventional purchase money mortgages includes the mortgage lender origination volume and market share for the top 15 mortgage lenders in Phoenix Metro in 2005 and 2006. Can you identify how many dead lenders there are in the report above and the impact those mortgage lenders had on the homeowners of Phoenix?