Home Foreclosures Aggressively Marketed by Phoenix Banks

by Donald Hanz on cities

Home foreclosures in Phoenix are being aggressively marketed by community and regional banks in Arizona in an effort to wipe out large volumes of repossessed properties in their books.

Desert Hills Bank, which held almost $60 million worth of foreclosure houses at the end of September last year, has been backing first time home buying seminars and home ownership classes held by the Federal Home Loan Bank and by community housing services and nonprofits to encourage home buying.

John Fahrendorf, chief executive of Desert Hills, said that he expects his bank’s real estate-owned holdings to be cut down significantly this year. He added that single-family houses and custom lots, which dominate Desert Hills’ real estate portfolio, are easier to sell than the cheap land for sale held by a lot of other financial companies in the Valley.

Towne Bank of Arizona has also been selling part of its $25 million worth of real-estate owned holdings, which are mostly single-family homes. According to its chief executive Patrick Patrick, it was difficult selling properties in the first quarter of 2009, but the second quarter signaled an improvement in the market. He added that his bank has been doing what it can to help clients sustain their monthly payments and keep their homes.

According to data from the Federal Deposit Insurance Corporation, Arizona community and regional banks were holding almost $800 million worth of home foreclosures and other foreclosed properties as of September last year. Some of the foreclosures, however, are located in other states where local banks also operate, but the huge majority of the properties are within the state.

Another bank, BNC National Bank, has cut down its real estate owned holdings from $10.4 million in the first months of 2009 to $7.2 million in the July-September quarter. Bank president Greg Cleveland said he hopes to have sold all the properties by the end of the second quarter. He mentioned though that the bank is not selling the properties at fire-sale prices.

First Community Bank, meanwhile, has $42 million worth of foreclosures as of the end of September last year, but most of the properties are located in New Mexico, where it is based, and in Colorado. Bank CEO Patrick Dee said it has written off about half of its REOs and has incurred losses on some of them.

Dee also said that home foreclosures will still drive the Arizona housing market this year, but they will be sold off faster this year compared to the past.